When a key supplier says deliveries may stop, the immediate fear is often practical: no stock for tomorrow’s customers, no materials for a job already sold, or a café service that cannot run. The best first response is a calm, accurate plan. It should protect the trading relationship without promising a payment the business cannot make.
What should I do in the next 24 hours?
- Confirm what is actually at risk. Ask the supplier which invoices are overdue, the amount, the proposed stop date and whether orders already accepted will still be delivered. Compare this with your own ledger and any credits or disputes.
- Identify critical orders. Which sales or contracts depend on this supplier in the next week? Can existing stock, an alternative supplier or a revised customer timetable safely bridge the gap?
- Build a short cash forecast. List expected receipts, payroll, rent, tax, finance costs and essential purchases. The point is to see what you can promise without creating a new crisis.
- Call the supplier before the deadline. Explain the verified position, propose a realistic amount and date, and ask what would keep essential deliveries moving. Put any agreed terms in writing.
- Tell affected customers carefully. If an order will be delayed, communicate early and honestly rather than taking more deposits or orders on an assumption you cannot support.
Business.govt.nz’s financial-trouble guidance stresses the importance of understanding debts and cash flow early. A business can have strong sales and still run short of cash when customer payments arrive after supplier bills. A cash-flow statement makes those timing gaps more visible than a profit figure alone.
Is this a one-off gap or a structural problem?
If a large customer is late but the underlying sale is sound, the gap may be temporary. If margin is too low, invoices are routinely overdue, or stock cannot be sold at a profit, new debt may only move the pressure to next month. Ask your accountant or business adviser to test the gross margin, collection assumptions and future supplier terms before committing to a solution.
Look beyond this supplier. Check Inland Revenue, rent, wages and other creditors. If the company cannot pay debts as they fall due, directors should seek professional advice promptly. The Companies Register’s director guidance cautions against incurring obligations the company cannot meet.
Which options might preserve trading?
A written supplier plan may be enough. Other possibilities include faster collection of genuine receivables, owner funds, reduced non-essential spending, a revised purchasing cycle, sale of surplus assets or appropriate finance. Compare the full cost and effect of each option. Do not let the promise of fast funding prevent you from checking whether next month’s cash position is better.
Where the borrowing has a genuine business purpose and suitable New Zealand property can be offered as security, HomeSec may consider $20,000–$1,000,000. We can discuss a business facing arrears or previous credit difficulties without treating that period as its whole identity. Assessment still considers the security, legal position, amount, use of funds and repayment path; approval is not automatic.
For approved cases, an open-term structure may allow flexible repayment. Up to six months with no scheduled payments may be available, but interest and fees can continue to accrue. In some complete cases funds may settle in as little as 24 hours; eligibility, approval, documents and settlement determine the actual timing. Offering property as security has consequences if the facility cannot be repaid, so compare the total cost and seek independent advice.
A useful first conversation
Tell us which deliveries matter, what amount would resolve the immediate problem, when sales convert to cash, the other obligations due and the property available. That lets us explore whether finance would create genuine breathing space or merely another bill. Let’s see if there is a workable funding option.