After a period of improving economic indicators, the outlook has become less certain, with emerging pressures starting to impact both households and businesses. While earlier interest rate cuts were a welcome relief, the reality on the ground is more nuanced.

Although the OCR has been held at this stage, there are ongoing inflationary pressures that could lead to increases in mid to late 2026. In the meantime, wholesale market rates have already moved, with many business funders increasing their 2–5 year fixed rates. As a result, we’re seeing business and asset finance rates rise in some cases, driven more by funding costs than central bank movements alone.

These wholesale pressures are also creating uncertainty around the future direction of residential rates, with the potential for upward movement in the near future.

More recently, gas supply constraints and rising energy costs have added further pressure, particularly for energy-intensive industries such as manufacturing, processing, and logistics. Uncertainty around availability and pricing is making it harder for many businesses to forecast costs, plan production, and maintain margins.

For business owners and managers, now is an ideal time to proactively review how your business is performing and whether cost-saving opportunities exist that won’t compromise your value proposition or customer experience.

In this environment, where input costs such as energy can fluctuate unexpectedly, optimising cash flow is essential to sustaining operations and seizing future opportunities. One of the most effective ways to do this is to reassess how you’re financing your business and its assets.

Structure can often matter more than interest rate

With rates no longer easing and funding costs increasing in some areas, historical fixed rates from prior years don’t necessarily deliver the best outcomes today. In this environment, how your finance is structured around your business cycle, assets, and cash flow is often more important than the rate alone.

Poorly structured debt can restrict your cash flow and growth, particularly when external pressures such as rising energy costs are already stretching operating budgets. That’s why Finance New Zealand works with businesses to realign funding structures to better suit their needs and current market conditions.

Short-term working capital options

In addition to reviewing longer-term funding structures, short-term working capital solutions can play a critical role in managing day-to-day cash flow. Options such as overdrafts, trade finance, invoice finance, or short-term business loans can help bridge timing gaps between income and expenses, particularly when costs like energy or inventory fluctuate unexpectedly. Having access to flexible, short-term funding allows businesses to maintain operations, meet obligations on time, and take advantage of opportunities without placing unnecessary strain on core cash reserves.

Creating headroom in uncertain conditions

With uncertainty around how long current conditions will persist, creating headroom now is a smart move. Whether it’s through extending loan terms, unlocking equity, or introducing flexible facilities, additional capacity can give your business the breathing room it needs to manage rising costs and changing conditions without putting pressure on day-to-day operations.

One of the most valuable roles I can play as your adviser is helping you prepare ahead of time.

This includes:

→ Creating headroom early by putting the right facilities in place before they’re needed, ensuring you have access to working capital if costs increase or conditions tighten.

→ Presenting your business clearly to lenders, with a well-prepared financial information pack that supports faster, more informed funding decisions.

→ Creating competitive tension between lenders, particularly while banks and non-bank lenders are actively seeking quality new business — helping ensure you’re accessing the best available options.

→ Structuring funding for flexibility, combining different solutions such as revolving credit facilities, term loans aligned to cash flow, working capital facilities, and equipment leasing.

Importantly, I can help you step back and look at the full funding picture across your business, including property lending, equipment finance, foreign exchange, and working capital, ensuring everything is structured as effectively as possible.

In unpredictable economic periods, the difference between a reactive decision and a well-structured funding position can be significant.

Is your funding still fit for today’s conditions?

Here are the key finance questions we help clients answer:

Cash or trade cycle
Is your funding term matched to your business’s operating cycle?

Asset loan structure
Are loans aligned with the productive or economic life of your assets?

Used or older assets
Are funder restrictions limiting your borrowing ability or requiring large upfront deposits?

Cash flow constraints
Are short loan terms draining cash unnecessarily? Restructuring over longer periods can provide immediate relief, especially when operational costs are rising.

Asset rich, cash poor?
Can you unlock equity to boost cash flow, absorb cost increases such as energy, pay down expensive debt (including IRD debt), or reinvest in growth?

Loan terms, conditions & security
Is your funder holding more security than necessary? Are covenants too restrictive? With growing lender appetite, businesses with strong financials may benefit from a market review.

How Finance New Zealand can help

We specialise in helping business owners:

• Assess and restructure existing debt for better cash flow
• Align loan terms with asset life and business cycles
• Unlock equity in business assets to increase liquidity
• Negotiate improved terms with funders or explore better options in the market

A proactive finance review today can help offset external pressures, including rising energy costs, and set your business up for greater stability and success.

Next steps

Contact your local Finance New Zealand adviser for a free, no-obligation chat about how we can support your business finance needs.