3 days ago
BNZ's new offer for technology entrepreneurs
The Bank of New Zealand (BNZ) is offering something new for technology entrepreneurs.
Photo:
RNZ / Nate McKinnon
The Bank of New Zealand (BNZ) is offering something new for technology entrepreneurs - a tailored home loan product.
BNZ said tech company founders struggled to get mortgages because standard bank lending criteria did not recognise how high-growth tech start-ups operated.
"The core problem is that for [tech] companies who have traditionally been in a loss-making phase, the negative earnings would be applied to their [founder's] personal income," Tim Wixon, BNZ head of technology industries, said.
Wixon said this negatively impacted their debt-servicing metrics using traditional banking criteria. He said that could effectively lock tech company founders out of the mortgage market.
BNZ's 'Founder Housing' programme used different metrics to assess tech company viability, noting that tech companies' finances were typically heavily front-loaded with research & development, marketing, and expansion, which could create losses that appear on founders' personal financial assessments.
Wixon said that it had already trailed the programme with a small number of tech company founders before its official launch, and that the bank's standard deposit, security and affordability criteria still applied before granting loans.
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