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Bank Financing

Obtaining Bank Financing 

In these challenging times for raising capital, more and more companies are turning to revenue-based financing to give their growth a boost. One popular option that's been making waves in the startup scene is Bank of New Zealand's (BNZ) debt capital services.

Over the past couple of months, we've been assisting some of our SaaS clients with their applications for revenue-based financing through BNZ. The BNZ financing offers:

  • Access to up to 33% of ARR with a minimum requirement of $0.5 million ARR.

  • Interest-only payments.

  • A financing term of up to 3 years.

The best part? It's non-dilutive! This can be a valuable tool for SaaS companies, whether you're bridging the gap to the next funding round, breaking even, or preparing for an exit. And for companies with a clear understanding of unit economics, this facility can supercharge your growth.

Now, when it comes to getting financial support from a bank, it's a whole different ballgame compared to securing investment from seed stage investors. Banks are all about the financial data. That high-level annual forecast and your Xero report that impressed your last investors won't quite cut it with the bank.

So what financial information do the bank generally need to make a loan assessment?

  • A detailed 3-year forecast, broken down month by month, with clear explanations of the key assumptions behind those numbers.

  • A Profit and Loss, Balance Sheet, and Cashflow forecast that are all interconnected – accountants usually call this the "3-way forecast model." In simpler terms, these forecasts need to reconcile, aligned and make sense together.

  • Present your current SaaS metrics performance with solid data to back up your calculations.

  • Keep your financial records neat and easy to follow.

Remember the bank managers you are dealing are busy people with lots of opportunities to evaluate, so you want to make the job easier for them. If it is too hard or they spot a few variances and discrepancies, it would be easier for them to pass on the opportunity.

If you're considering applying for a bank loan to finance your company, make sure you're well-prepared when it comes to your financial information and SaaS data. Or, even better, give us a shout, and we'll see how we can support you with the application.