Working capital strife felt by larger exporters

The high cost and limited availability of working capital for export contracts was a lead gripe of exporters surveyed by the New Zealand Export Credit Office.

Even respondents with turnover of more than NZ$50 million cited the shortage of working capital as a constraint in funding their export growth.  Those firms are restricted from NZECO's loan guarantee which is limited to firms with annual turnover of less than $50 million, although this might be up for review.

NZECO received responses from 80 exporters in New Zealand to the recent survey.

Performance bond requirements were also seen as a major barrier to increasing international trade. Other challenges identified included "a lack of confidence in their buyers' intention to pay", an "inability to differentiate genuine queries from 'tyre kickers or scammers'," and how New Zealand's "distance to market" can hinder a company's ability to monitor what is happening in their export markets.

Ninety per cent said they did not use trade credit as a trade finance solution.

One third of respondents said that export sales would increase if they were able to offer leasing as an option.