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Short-term Working Capital Guarantee

Page updated 29 Jun 2009

The NZECO short-term working capital guarantee can help exporters when they have reached their banks lending limits and need an extension to their facilities to support general export growth.

The guarantee has been specifically designed to assist exporters when facing a working capital shortage while growing their business.

The product is a guarantee from NZECO to a bank. It provides support to a bank to enable it to generally lend up to 20% of additional funds to exporters, without requiring additional security. It is a bank led product.

Participating Banks (as at October 2008)

  • Kiwibank
  • Westpac
  • ANZ
  • The National Bank

Download Product Brochure

A brochure for this product is available in Adobe PDF format: nzeco-swcg-v2.pdf (141kb).

Benefits of Short-term Working Capital Guarantee

Key benefits for medium sized exporters:

  • Provides access to additional funding (which would not otherwise be available from your bank) to grow your business;
  • No additional security needed;
  • Minimal additional documentation required;
  • No need to change your existing banking relationship;
  • Flexible terms between 3 and 12 months;
  • Available for general export funding;
  • Can enable you to take advantage of immediate export opportunities.

Eligibility

The bank will determine each exporter’s eligibility for the short-term working capital product, and then recommend approval to the NZECO.  The following criteria will be applied:

  • Sales turnover up to $50 million;
  • The goods/services exported must have a at least a 30% value add in New Zealand;
  • Firm must be an established exporter (minimum 2 years) with an existing banking relationship, including lending facilities;
  • The firm must be profitable and have a reasonable financial standing.

Product Features

Maximum value

Up to the amount of an exporting firm’s annual export turnover but generally limited to 20% of its total bank credit facilities.

Terms & fees

3 to 12 month terms subject to review and renewal.  Renewal beyond 24 months will not be permitted.

The fee will vary depending on the risk assessment of the exporter, and generally be the bank fee + NZECO premium fee of 4%-6%. 

Security

No additional security required.

We recommend that you contact your relationship manager at your bank or NZECO for further information regarding this product.

Questions and Answers

Who is eligible for this product?

Any established exporter, with turnover less than $50 million, which is profitable and has reasonable financial standing.

Which banks have partnered with NZECO to offer this product to exporters?

As at September 2008, NZECO offers the short-term working capital via Kiwibank and Westpac. NZECO continues to work with other banks regarding the offering of this product to their clients.

How do I apply and what do I need?

Your bank determines whether you qualify for the short-term working capital guarantee. You should discuss your working capital requirements with your bank to see if you may qualify for the short-term working capital guarantee, or are able to increase your facilities without the need for the working capital guarantee. If your relationship manager is unaware of the product please get them to call the NZ Export Credit Office on 04 917 6080.

What is the approval process?

Your bank will go through its normal credit assessment procedures and if the process results in you being refused additional working capital due to the lack of sufficient security, and the bank selects you as a suitable NZECO short-term working capital guarantee client they will forward an application to the NZECO.  The NZECO will consider the application for a working capital guarantee within approximately five working days and then respond to your bank. The bank then provides a result of the decision to you. If you have been accepted, you will be provided premium pricing and have up to 30 days to accept the terms offered by your bank and NZECO.

How much can each exporter get?

Up to the amount of an exporting firm’s annual export turnover but generally limited to 20% of its total bank credit facilities.

How much does it cost?

A risk based premium of 4%-6% will be charged by the NZECO for the facility and the bank will also charge interest and possibly fees on the funds provided.  

How long does the approval process take?

Once your bank has determined whether your firm is eligible and has applied to the NZECO, the consideration by the NZECO should take approximately five working days until final approval.

How do I apply and what do I need?

When available, the NZECO will work with you and your bank to consider whether you qualify for the short-term working capital guarantee. You should discuss your working capital requirements with your bank to see if you may qualify for the short-term working capital guarantee, or are able to increase your facilities without the need for the working capital guarantee.

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