How to manage small business loan repayments

Home » Blog » How To Manage Small Business Loan Repayments

How to manage small business loan repayments

Tips for managing small business loan repayments | Prospa NZ
For the vast majority of small businesses, being able to access cash at the right time is critical to keep your business going and growing.

A small business loan is one way to access that cash. Follow these tips to ensure you’re putting your best business foot forward when it comes to getting the most out of your small business loan.

Manage your cash flow carefully

Cash flow is important to the success of any small business – this you know. So it pays to keep it front of mind in the good times, and the bad, especially when you have loan repayments to consider. Keep a close eye on it by:

  • Issuing invoices on time – the earlier you invoice, the earlier you’ll get paid.
  • Regularly updating all other accounting and reporting – this will ensure you’ll notice any issues sooner and have them fixed faster.
  • Building a cash reserve, if possible – it’s always good to have something to fall back on should the unexpected happen. It will also stand you in good stead during seasonal slumps.
  • Projecting your cash flow well in advance – a cash flow calculator tool will be your best friend in this.

Get ahead of the game at peak times

So, business is booming? Great news. And while it may be tempting to celebrate, now’s the ideal time to consider paying more towards your loan. After all, it’s a move that will save you a significant sum of money down the track.

Let’s take Alison, for example. She’s a restaurant owner, has a $50,000 small business loan that she’s paying off at a rate of $600/week over 1 year and 9 months. Her business is doing well and she could pay more, but she’s just cruising at the agreed rate.

Alex, a mobile handyman, has a $50,000 business loan that he’s paying off at a rate of $600/week over 1 year and 9 months. His business is booming and he decides to add $200 to his repayments. This saves him $1,000 and he pays the loan off 5 months early.

Note: These are examples only and general in nature.

Keep a strong credit score

Good credit makes life much easier for a small business owner. Having a great credit report will open up more options when it comes to accessing finance, and has the potential to save you money in repayments.

Build and maintain a good credit score by:

  • Scheduling reminders to ensure bills are paid on time.
  • Limiting repayments by consolidating your credit cards.
  • Keeping a close eye on your credit cards by not hitting the limit.
  • Going over credit card bills with a fine-tooth comb so you can address any errors.

If your business is ready to take the next step, talk to Prospa today on 0800 005 797 or apply online for a small business loan.


The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

Keep reading

6 strategies to manage cash flow during COVID-19

25 March 2020 | 6 min read

Many small businesses are seeing their cash flow get squeezed because of the coronavirus crisis. Here are 6 ways that might help you get some breathing space.

View more

Infographic: A small business guide to the NZ economic stimulus package

23 March 2020 | 1 min read

As the economic impact of COVID-19 reverberates globally, a stimulus package of subsidies and support schemes for small business has been launched.

View more

What work-related car expenses can you claim?

28 February 2020 | 5 min read

If your car is like a second office to you, then you need to know what related tax deductions you are eligible for. Here’s what you need to know.

View more

Subscribe to the Prospa Blog

Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.