How to expand into small business finance and support your clients

Prospa New Zealand’s Managing Director Adrienne Begbie on why small businesses are turning to alternative lenders, and how advisers can better support small business clients through challenging times. 

At a glance

Here’s a snapshot of advice from our interviewee:

  • Prospa New Zealand’s Managing Director, Adrienne Begbie, says small businesses have had it tough over the past couple of years, but are showing grit in the face of challenges.
  • Research found that only 56 per cent of small businesses that applied for funding from all sources in the past six months received the full amount they requested.
  • Advisers wanting to diversify have a unique opportunity to show small business clients how capital could improve cash flow and help their business grow.
  • Adrienne shares her top tips for advisers wanting to break into small business finance.

Being a small business owner hasn’t been easy over the past 24 months. From lockdowns to catastrophic climate events to inflation, there has been plenty to cause sleepless nights. But despite the uncertainty, Kiwi businesses are showing innovation and changing with the times. 

Prospa New Zealand’s Managing Director, Adrienne Begbie, says that the increased operating costs and staff shortages many small businesses are facing have also impacted the decisions traditional lenders and banks make when considering loan applications. 

“With all of this at play, it’s easy to see why there’s a level of general uncertainty about the future,” she says. 

Recent research from RFI Global* found that approximately 24 per cent of Kiwi businesses are declined lending products, adding to the uncertainty. 

“If you consider the time it takes to apply for a credit product, and the possibility of being declined, it may not be ideal for a business to turn to traditional lenders when capital is required fast,” she says. 

How to support your small business clients 

With so many small businesses navigating a challenging market, now is the time for advisers to grow their businesses and expand into small business finance. 

“Kiwi business owners are increasingly choosing to access funds with alternative lenders, ensuring that they don’t have to pull back on costs, when that may hinder their businesses’ growth,” says Adrienne. 

“Advisers, brokers or accountants are always a great point of contact to assess a business and help business owners make educated decisions that will allow them to take control and feel more confident.” 

Starting up a conversation with clients about the opportunities presented by business finance can benefit both parties. 

“Diversifying ensures that you can help your clients with all their financial needs,” says Adrienne. “Partners should start reaching out to business owners within their customer base to help them consider ways to sustain and grow their businesses. 

“For small businesses, being able to access cash flow is their most important factor, [allowing them] to take on opportunities, maintain profits and grow their businesses,” says Adrienne. 

Adrienne’s top tips for advisers 

Adrienne says business owners are determined to push on and build resilience – and almost every business could use some form of capital to fuel growth. Advisers wanting to diversify don’t have to look too far. Start with your client base and see who’s self-employed. 

“Adding SME commercial lending to the suite of services is not complicated,” she says. Here are her tips for writing small business finance: 

  • Assume every business owner needs capital. Consider what your clients could do with funding. “Few small business owners would say no to funding if it meant they could improve or expand their business, so operate under the assumption that all owners are seeking some form of capital.” 
  • Learn about commercial credit. “There’s still a way to go for advisers to expand their knowledge of how non-banks operate. Understanding the different lenders is an incredibly valuable asset in the funding toolkit, which allows advisers to help solve their clients’ problems more often.” 
  • Start a conversation with your clients. Get to know your small business clients and understand their needs – that’s the essential conversation that unpacks where the opportunities for capital lie. 

*RFi New Zealand SME Banking Council, May 2022 

Thinking about partnering with Prospa? Find out how you can connect your small business clients with the funding they need. 

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