Maintaining adequate working capital is essential, not only for the day-to-day operations of a business but also for its long-term survival.
The faster a business expands, the more cash it will need for working capital and investment. Good management of working capital can generate cash for investment, which in turn can help improve profits and reduce risks.
The amount of funds tied up in working capital typically fluctuates throughout the year in response to the changing needs and demands of the business.
The graph below illustrates funding options for the typical business.
Fluctuating working capital (short-term debt)
The fluctuating component of working capital is used for daily cash flow fluctuations. This short-term requirement is typically financed from a short-term source such as an overdraft facility, which can be drawn on and repaid easily and at short notice.
The accessibility and flexibility of short-term debt carries a higher cost than longer-term debt such as term loans.
ANZ offers an overdraft facility to help manage day-to-day cash flow fluctuations and working capital requirements.
An overdraft facility effectively turns an ANZ Commercial Current Account into an all-in-one solution for all your transactional and working capital requirements. You can use this account as your main working capital account.
How ANZ can help
We can provide a mix of funding and cash flow solutions for your business. If you also have international exposure, we can provide multi-currency and trade solutions to complement your New Zealand Dollar facilities.
For more information on ANZ working capital solutions:
Contact an ANZ Regional Director:
- Commercial Banking - turnover $2M to $150M
- Institutional Banking - turnover above $150M
- Property Finance - investment and development
ANZ credit criteria apply, and an establishment fee may be payable. Other fees, charges, terms and conditions apply.