Bank of New Zealand (BNZ) has launched BNZ Revenue Based Financing for Software as a Service (SaaS) businesses, giving this important segment of New Zealand’s tech industries early access to capital to fund growth and expansion plans.
BNZ Head of Technology Industries, Tim Wixon, says, “Revenue-based financing will make a huge difference for kiwi Software as a Service businesses, helping them raise money to fund growth and take on the world.
“Earlier stage SaaS businesses are often faced with the same challenge – they need capital to grow but have limited places to raise it. This can be a handbrake on their growth, and a missed opportunity for our economy.
“BNZ is providing a solution, giving SaaS businesses another non-dilutive capital alternative,” says Wixon.
Loans are available to New Zealand SaaS businesses that are relatively early in their lifecycle, with at least $500,000 worth of Annual Recurring Revenue. They can borrow up to 33% of their Annual Recurring Revenue for up to a three-year term, and unlike many other forms of debt financing, a personal guarantee is not required.
Wixon believes this will make a real difference for founders: “Typically, SaaS businesses have limited funding options earlier in their lifecycle and almost all of them involve the founders and early investors giving up part of their ownership. We think this will be a very welcome proposition for both founders and their investors.
“BNZ is a leading technology bank – we have dedicated technology focussed business bankers and expertise to help these businesses through all parts of their lifecycle. Launching a revenue-based financing alternative is a natural next step.
“New Zealand’s tech industries are crucial to building a more productive economy and have potential to be a leading New Zealand export in the future,” says Wixon.