Supplier stop supply notice NZ: what to pay, what to negotiate and how fast stock can move again

A supplier stop supply notice in NZ is the supplier using its own terms of trade to pause deliveries until the overdue amount is paid. It isn’t a court document and it doesn’t start a statutory countdown. That’s the good news. The less good news is that it can stop your stock within hours, so the way back is a phone call and a payment plan, not a legal argument.

This guide is the first-24-hours sequence: what the notice actually is, what to read, what to offer, and what funding can realistically do if the full balance is the only way back.

Is a stop supply notice the same as a demand?

No, and the difference decides how you respond.

	Account on stop	Statutory demand
Where it comes from	The supplier’s terms of trade and credit application	The Companies Act
Is there a fixed clock?	Only what the terms say	Yes: 15 working days to comply, 10 working days to apply to set aside
Who can end it?	The credit controller, by agreement	A court, or payment
What it stops	New orders and deliveries	Nothing yet, but it puts the company’s solvency in play

A hold is a commercial decision. You’re negotiating with a person, often one who’d rather keep a customer than chase one. A demand is a legal step with dates. If a demand has been served, go to the statutory demand page and phone your lawyer first.

If you can’t tell which you’ve received, check whether it came from a lawyer or the supplier’s accounts team, and whether it mentions the Companies Act. Account holds almost always come from accounts.

What should you read before you ring?

Spend 15 minutes on three documents. They set the starting point of the call.

1. The credit application you signed. It usually says what happens on late payment: suspension of the account, a switch to cash on delivery, interest and recovery costs. Note any clause requiring written notice.
2. The supplier’s current terms of trade. Suppliers update them. The version on their website may differ from the one you signed.
3. Your own ledger. List every invoice that’s overdue, the dates, and any that are disputed, short-delivered or credited. Disputed lines are the first thing to separate out, because you can pay the undisputed part and still argue the rest.

Business trade credit sits outside the consumer credit laws, so the contract is the main rulebook. That makes it more important to know what yours says.

What does the supplier’s PPSR registration change?

Many suppliers sell on “retention of title” terms, meaning they remain the owner of the goods until they’re paid. Those that register on the Personal Property Securities Register get more protection. The Companies Office’s PPSR guidance says a purchase money security interest has priority if a financing statement is registered “within 10 working days after the debtor obtained possession of the property”, and that the priority can apply even where a bank registered first.

Two practical points follow.

• Search the register for your own business. It takes minutes on the PPSR site. You’ll see which suppliers have registered against you, and over what. That tells you how much leverage each one has before you ring.
• Check before you borrow. A new lender will see the same register. If a supplier holds a registration over your stock, say so early, and expect that to shape what can be offered. Our guide to a PPSR check shows how to read the results.

A supplier with no registration over unsold stock still has its contract. It just has fewer options if things turn.

What’s the first-24-hours sequence?

Here’s a plan for a stop that lands on a weekday morning. Adjust the times to your own cut-offs.

Hour 0 to 2: read and list. Find the terms and the ledger. Work out the total overdue, the part that is disputed and the part that is undisputed. Know the number you can pay today without borrowing.

Hour 2 to 4: ring the credit controller. Use the credit application’s contact, not the delivery driver or the rep. Say plainly what happened, what you’ll pay and when. People respond to a specific offer.

Hour 4 to 6: put it in writing. Email what you agreed on the call, with dates and amounts. If the supplier agreed to release stock on part-payment, ask for that in the same email.

Hour 6 to 24: pay and confirm. Make the part-payment, send the remittance and ask for written confirmation that the account is released or moved to a cash basis. Don’t assume it’s lifted because someone said so on the phone. Check with a small order.

Worked example: a Tauranga cafe wholesaler

Illustrative only. A food wholesaler owes its main dry-goods supplier an overdue balance after a slow quarter and a late-paying customer. The supplier puts the account on stop on Monday morning. The owner finds the signed credit terms, sees that the supplier can move her to cash on delivery, and works out she can pay about a third of the balance from the week’s takings.

She rings the credit controller before lunch and offers: a third today, the rest in two instalments over the next three weeks, and cash on delivery for every new order until the balance is cleared. The controller agrees by email, releases a delivery for Tuesday and puts the account on a cash basis. The stock moves the next day, and the supplier gets paid on the dates promised.

She didn’t need a loan. She needed to ring early with a specific number.

When does cash on delivery help, and when does it hurt?

Cash on delivery (COD) is the usual halfway house. For the supplier, it removes the risk on new orders. For you, it brings forward cash you’d otherwise have paid on 20 or 30 day terms.

• It helps when the overdue balance is manageable and you have enough weekly cash to pay as stock arrives.
• It hurts when COD and paying down the old balance together squeeze your cash flow beyond what you take in. That’s when a plan that looks fine on the phone breaks in week two.

Work out the weekly cash cost of COD before offering it. If the supplier delivers $12k of stock a week, going from 30-day terms to COD means a month’s worth of purchases has to be funded up front, as well as the plan to pay off the old balance. That timing gap is a working capital problem, not just a supplier problem.

When does funding make sense?

Funding is worth considering when:

• the supplier won’t release stock without the full balance;
• the stock is what earns your next month of revenue, for example seasonal lines before Christmas;
• or the COD gap is wider than your cash flow can carry.

The speeds on this site are possible, not promised. Same-day options exist for smaller unsecured amounts, and property-secured amounts from $20k to $250k are possible the same day. Larger amounts, up to $5m, can be possible within 24 to 48 hours. Two things set the real timing:

1. Documents. The business loan documents pack is what a lender looks at first. If you have recent bank statements, your latest financials and the supplier’s overdue statement, the decision is quicker.
2. Payment cut-offs. Approval isn’t the same as funded money in the supplier’s account. Our approval vs funding page explains the stages between yes and money. Ask your bank for its same-day cut-off, and ask the supplier whether it accepts an online transfer as cleared or wants confirmation first.

For a gap of a few weeks, short-term business loans and working capital loans are the usual fit. If you want a quick read on where you stand, try the 24-hour readiness check, or check your options here and we’ll tell you what could work.

What mistakes make a stop worse?

• Going quiet. Supplier staff escalate when they hear nothing. A short call early is almost always better than a long one later.
• Paying one supplier while ignoring another. If more than one account is overdue, list them all and rank them by how fast each can stop your supply.
• Promising a date you can’t meet. One missed instalment ruins goodwill faster than the original debt did. Offer smaller amounts you’re sure of.
• Accepting terms in a phone call only. Get the plan in writing the same day.
• Borrowing without checking the PPSR. An existing registration can limit what other lenders can take as security.

Ready to get stock moving again?

A stop on your account feels urgent because it is, but the urgency is manageable once you have a plan and the paperwork to back it. If the plan needs funding to close the gap, it’s worth knowing early what could be done.

Enquiring takes about 60 seconds, and there’s no credit check at that stage, so asking won’t touch your credit file. We don’t send your details to a pile of lenders. A real person reads your situation and calls you to talk through what’s realistic. Please fill the form in accurately, including how much is overdue and when you need stock, so we can match the right option first time.

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