A small business accounting specialist is warning new bank lending restrictions which come into force today will make it tougher for people to buy, grow and fund small businesses.
Matthew Bellingham, chairman of the public practice advisory board for the New Zealand Institute of Chartered Accountants and a partner at Auckland firm Bellingham and Wallace, said new loan to value ratio restrictions would have "unintended consequences" on the sector.
From today banks must cap new lending on houses to people with less than 20 per cent equity to 10 per cent.
Bellingham said virtually all small business owners used their property as security and it was very common for those borrowing to have higher than an 80 per cent loan to value ratio.
"It's going to make it harder for people to buy a business, and one that concerns me more is when a small business requires some temporary funding. If they are going to need that money for more than a month, then that is going to make it really difficult."