Every now and then, businesses can encounter cash flow struggles, whether you have overdue invoices or an unexpected bill to pay. When this happens, it’s typical to ask your bank for help. But did you know there’s an easier, cheaper way?
As a TMNZ customer, you can access funds you have paid into our tax pool at any time. You can draw out your deposits as an affordable line of credit without the headache of a loan application, conversation with a bank, or Inland Revenue (IRD) paperwork and still keep your original tax deposit date.
How it works
Imagine your business is suddenly hit with a big cost and you need some quick cash. By getting in touch with TMNZ, you can access the money you’ve already paid into and held in our pool.
You can draw down the funds on a temporary basis, and our flexibility helps you solve a short-term business challenge in a simple, cost-effective way.
TMNZ Tax Drawdown allows you to use your tax payments in the pool as collateral to take out funds at attractive interest rates. You can request money at any time and it will land in your account within three to five business days (provided AML requirements are met).
The benefits
Tax Drawdown puts you in control. You can borrow money for a minimum of four weeks or a maximum of up to 75 days after your terminal tax date. Once you’ve paid us back, we can continue to hold those tax payments in the pool (which will be available for a future drawdown) or transfer the payments to the IRD to meet your tax liability.
Small businesses and larger companies alike can tap into Tax Drawdown, and there’s no limit to how much of your tax deposit you can withdraw.
If your current tax pool doesn’t do drawdowns, fear not. You can transfer your tax pool payments to us and kick-start the process immediately.
While Tax Drawdown is a bit like a line of credit, we don’t charge line fees or establishment fees like the banks.
TMNZ can also offer more competitive interest rates than the banks. Our rates are the same as our finance rates, which are much closer to the cost of a home loan than a small business loan. Interest costs depend on how much money you take out and the duration of your withdrawal and you’re only charged for the period you use the funds.
Kathleen Payne, Director of Strategic Partnerships at TMNZ, says Tax Drawdown can be a business lifeline.
“It’s really useful for businesses that need to make a capital investment, buy stock, or simply position themselves for the rest of the year. People can use our tax pool to their advantage and it’s so easy to do, with interest costs limited to the time they’re using the funds. It’s another working capital option for businesses, particularly in an environment where cash flow is causing a lot of constraints.”
How to use Tax Drawdown
Accessing your money is a painless process. Get in touch with us or ask your tax adviser to call or email our team.
Kathleen says Tax Drawdown applications are “relatively simple” and can be made multiple times a year.
“A small amount of information needs to be provided. We ask how much money you need and how long you need it for. We then work out your interest rate, finalise the terms, and get it signed.”
Kathleen says Tax Drawdown can help businesses and the New Zealand economy by freeing up money for investment and growth.
“If you think about what businesses use the funds for, it’s additional spending in the economy. Tax Drawdown enables people to use money at a reasonable cost to make capital investments, investments in staff, or meet a market challenge.
“All of these things help businesses survive and thrive, and it has a circularity for the whole economy,” she says. “It’s money going back into the business community while helping companies meet their tax liability. So everyone’s a winner.”
In need of flexible, affordable financing? Contact our team to take advantage of Tax Drawdown today.