Many companies and their suppliers have started struggling financially since the COVID-19 pandemic hit various markets worldwide. As a result, New Zealand banks have promised to pay their goods and services suppliers within two weeks.
The New Zealand Bankers' Association said its members' commitment follows the government's goal for public sector agencies to pay 95% invoices from businesses within 10 working days.
Roger Beaumont, the chief executive officer of the NZ Bankers' Association, said banks must pay their suppliers quickly as small- and medium-sized businesses need stable cash flow more than ever due to the impacts of the pandemic.
“The banking industry understands how important prompt payments are to the viability of many businesses, especially at the moment. We’re pleased to make this commitment to support New Zealand businesses. It’s another way in which we’re supporting our economic recovery,” Beaumont said.
“Last year, our banks spent $5.7 billion running their businesses in New Zealand. That includes paying local businesses for goods and services. We expect this initiative will make a difference for many businesses.”
Some banks have already paid their suppliers within a week of receiving invoices. However, some confirmed that they would pay within two weeks.
Other ways that NZ Bankers' Association members have been helping business include restructuring loans to reduce payments, providing new business loans, deferring mortgage payments for up to six months, consolidating loans to help make repayments more manageable, and providing access to short-term funding.