Financial assistance (whitewash)

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

Financial assistance is a company helping someone buy its own shares, or its holding company's, most often by guaranteeing or securing the buyer's acquisition loan once the purchase completes. The rules differ by market: Australia permits it where it does not materially prejudice the company, its shareholders or its ability to pay its creditors, or where shareholders approve it under the whitewash procedure; New Zealand permits it through procedures resting on board or shareholder approval and the statutory solvency test; the UK lifted the prohibition for private companies in 2008 and keeps it where a public company is involved. Acquisition lenders often make completing the procedure a condition subsequent.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.