Why fast-growing businesses are often the most cash-strapped.

There's a moment most founders know but few talk about openly: the month your revenue is up, your pipeline is strong, and your bank account is somehow emptier than it's ever been. It feels like a personal failure. It isn't. It's a structural feature of how growth works, and once you understand it, you can start doing something about it.

It's a problem we hear about constantly from people in our community, so we sat down with the team at Taxi, the Auckland fintech built to solve exactly this, to talk about why it happens and what founders can do about it.

Success has a funding gap

Here's the paradox. When a business grows fast, it typically needs to spend money before it receives it. You hire to meet demand that hasn't fully arrived yet. You buy stock for orders you haven't invoiced. You take on a bigger premises to give yourself room to scale. Every one of those decisions is the right call, and every one of them drains cash before the revenue catches up.

This is called overtrading, and it catches ambitious founders off guard precisely because it's a symptom of doing well. The faster you grow, the wider the gap can become between cash in and cash out. Investors know this. Banks, to their limited credit, sometimes acknowledge it. But for most business owners navigating it alone, it just feels like running hard and getting nowhere.

The cruel irony is that slow-growing or stagnant businesses often look more cash-comfortable. They're not deploying capital into anything. Growth itself creates the squeeze.

Why Taxi exists

Taxi was founded by Nicola and Josh Taylor, a husband-and-wife team who spent over a decade building Tax Traders, New Zealand's most preferred tax pooling provider, before turning their attention to the funding gap directly. Nicola trained as a lawyer, and the mission she describes for Taxi is about levelling a playing field she sees as tilted toward big companies: making the benefits of New Zealand's tax system available to every business paying tax, not just the ones large enough to negotiate directly with a bank.

"We are on a mission with Taxi to change so much of how we think about business and business funding," Nicola has said of the company. It's a mission built on a simple observation: New Zealand businesses collectively have billions of dollars sitting with IRD in provisional tax payments, doing nothing for them while they scramble for cash elsewhere.

Taxi's chief executive, Dan Faris, is blunt about what founders are dealing with when they go looking for capital elsewhere. He's described the process of applying for a bank overdraft as too often "expensive, hard to get, and often undignified", with businesses put "through the wringer" trying to get funding from the big banks. Anyone who has sat across the desk from a business banker while their growth numbers work against them will recognise that description.

The invisible asset sitting on your balance sheet

Here's what most growing businesses don't realise: there's a source of funding hiding in plain sight, one they're already generating and almost certainly not using.

Provisional tax.

If your business is profitable, you'll be paying provisional tax in instalments throughout the year. Depending on your size, that could be tens of thousands or hundreds of thousands of dollars, effectively ring-fenced and sitting with IRD.

Traditionally, those funds were locked away. You paid them, IRD held them, and the money was gone from your universe until your tax obligation was settled. But the way tax pooling works in New Zealand means those payments don't have to just sit there. They can work as security for funding, at rates that, until recently, weren't available to businesses that weren't large enough to negotiate with banks.

How it works

You pay your provisional tax through Taxi rather than directly to IRD. Those payments are held securely in a Government-controlled bank account. Once you've done this, you can access funds equal to up to 90% of what you've paid in over the last 12 months, at a rate of roughly 5.4% per annum, well under half of what most business overdrafts charge. There are no credit checks or financial disclosures required*, and funds are typically available the next working day.

The tax still gets paid. IRD still gets what it's owed. But instead of that capital sitting idle while you stretch for cash elsewhere, it becomes an affordable, already-yours business funding tool.

The mindset shift

When founders don't know this option exists, they typically end up somewhere more expensive: a bank overdraft, credit card debt, a director tipping in personal funds, delaying suppliers, or turning down opportunities because the timing just doesn't work. All of those options carry a cost, financial, relational or operational, and they're often more expensive than they need to be.

The businesses getting ahead right now aren't necessarily the ones with the biggest war chests. They're the ones being smarter about the capital they already have: finding funding in places their competitors haven't looked, keeping their cost of capital low, and staying nimble enough to move when opportunities appear.

Provisional tax has always been an obligation. A growing number of NZ founders are turning it into an asset.

Find out more about Taxi.