As the next provisional tax submission deadline fast approaches, small and medium sized enterprises (SMEs) find themselves under immense pressure to ‘survive to ‘25’. Those same SMEs are often faced with an uphill battle to access necessary funding from lenders to weather the economic storm. It’s a problem that NZ owned fintech company, Taxi, is working to shift - and they say it could propel not just the nation's SMEs, but the economy too.
Dan Faris, Taxi’s CEO, believes business funding in Aotearoa is too expensive, too hard to get and accessing it is often undignified.
“There are over 400,000 small and medium businesses in New Zealand, and they are looking for capital. We hear daily from businesses that have been put through the wringer trying to gain funding from the big banks. Often, they’re simply being told “no,” and then if they’re approved, they can be met with colossal interest rates.
“These are sustainable businesses that are looking to access cash flow. Even without the headwinds, the same businesses may just want to navigate seasonal ebbs and flows, invest in growth, or simply enjoy the peace of mind of having funding available. The hard truth is that our banking sector is not meeting the needs of New Zealand’s SMEs, and by extension, they’re not meeting the needs of our economy.” said Faris.
Taxi is an innovation in business funding that utilises provisional tax payments to access funding at about half the cost of a bank overdraft. “It’s a means of accessing funds which, until now, has only been attainable by the big corporates,” added Faris.
This approach means that Taxi interest rates are low, about half the rate of an equivalent big bank overdraft. Taxi funds are both flexible and easy to access; as long as a business pays their provisional tax through Taxi, accessing funds is simple.
Recent research from NZIER found that a conservative uptake of Taxi (defined as 10,000 businesses accessing up to $50,000 each) could save $50 million in interest payments per year, boosting GDP by up to $900 million per year. Long-term, widespread use of Taxi (defined as 290,000 businesses accessing $20,000 each) would increase GDP by up to $10.8 billion or 2.7 percent annually - equivalent to the food and beverage manufacturing industry.
Faris hopes that meaningful competition will encourage banks to decrease their profit margins. “We want to see New Zealand businesses thrive and our banking sector could have an enormous impact here simply by giving those businesses a better deal. We would be thrilled to see banks following our lead and offering reasonable interest rates.”
Because Taxi is a New Zealand company, economic value is retained in New Zealand in a way that doesn’t happen with the major trading banks.
Taxi is urging business owners and decision makers to assess their need for funding prior to the provisional tax deadline (August 28, 2024) and to pay their tax through Taxi. To access funding via Taxi, provisional tax payments must be made via Taxi.
Ends.
Media Kit: For headshots and business info, see Taxi’s media kit here.
For more information, please contact:
Ellen Hunt // ellenhunt@thinkerbell.com // +64 21 583 171
About Taxi
Taxi is New Zealand's first tax-powered working capital solution that allows all businesses that pay provisional tax to use these payments as security to access funds at about half the cost of a big bank overdraft. Using a mix of FinTech smarts and personal service, Taxi is an easy and affordable way for Kiwi businesses to access working capital. Taxi was developed and is run by the team at IRD-approved tax pooling intermediary, Tax Traders, who have more than 10 years’ experience providing innovative tax solutions, utilising New Zealand’s provisional tax framework.
