Small businesses have become the backbone of the New Zealand economy as they account for a staggering 97% of all entities in the country. The contribution of this segment to the GDP is 26%, and it will continue to increase in the coming years. With maximum freedom offered to entrepreneurs to start a business, it has become quite easy for Kiwis to realise their dreams.
Supporting their endeavours, the government is also boosting the growth of small businesses by providing several grants. It is essential for the government to offer this aid as the small organisations tend to struggle with funding and growth issues in the initial stages. If you are planning to launch a start-up or purchase a business for sale in New Zealand, then you can take advantage of these grants.
It enables business entities to get funding and mentorship from experts without offering equity in their enterprise. However, you need to be clear about the facts and must be able to differentiate it from the fiction. So here is a rundown on the grants available to small businesses in New Zealand.
Don’t Put Your Hopes on Freebies
If you have been under the impression that the government will take care of funding your venture, then you are mistaken. It is not as simple as that! Why should the government bear the burden of putting you on the path of success, or paying your debts with the help of taxpayer’s money?
They only offer grants which provide entrepreneurs with cost-effective business advice and assistance that aids in improving skills and knowledge and arranging liaisons with other networks.
However, you need to check your eligibility for the grants by registering at the local office of the Regional Business Partner Network. Any business can get registered for free throughout the country and enjoy the wealth of information provided by the network.
Research and Development Grants
The Callaghan Innovation, an innovation-centred government agency, offers the ‘Getting Started Grant’ that helps in the research and testing of products. You can check the utility of the product and take it to its development phase with the help of the aid. Entrepreneurs can secure 40% of their eligible R&D project expense (up to $5000 of their value) as well as technical advice. The amount can increase if you get the ‘Project Grant’ which is aimed at more prominent technological innovations.
The Callaghan Innovation also offers ‘Students Grants’, which allow organisations to collaborate with students. These are categorised as ‘Experience Grants’ wherein the students work for your organisation during their vacations; ‘Career Grants’ where they join the business as an employee after completion of their education; and ‘Fellowship Grants’ where they help the business while completing a PhD or master’s research course.
Besides these, the agency funds several accelerators and technology incubators, which provide assistance to eligible start-ups in terms of funding and development to become a global technology business.
If a small business intends to expand into foreign markets, it can benefit from the export grants offered by the New Zealand Trade and Enterprise Department. The government department helps in finding suitable markets for your products/services, sources of funding, creating investment strategies and polishing up your pitches. Some of the qualified businesses with growth plans can also get 40:60 (government: customer) co-investment.
These are meant for businesses which have moved past the start-up phase and are looking to grow with the help of an expansion plan that is right for their organisation. It is beneficial for regional businesses which can apply for the Provincial Growth Fund (PGF) as their locations are mired in several economic challenges, such as lack of skilled workers, unemployment and low productivity.
These are available for both non-commercial and commercial organisations in the forms of grants and loans, respectively. PGF is dedicated to the betterment of regional projects so that they enhance their output and create more jobs with better pay scales.
Industry and Group Grants
Many industries and groups can avail grants in their specific domains. For instance, the Ministry of Primary Industries provides grants and funding to businesses operating in the primary sector, and other organisations which are dependent on the primary sector for the production of their goods and services. The funding is available for various requirements including enhancement of sustainability, boosting output, expanding into international markets etc.
There are various schemes for organisations which lend their support to fisheries research, irrigation scheme upgrades, sustainable farming, Maori collective ownership, etc.The Ministry of Maori Development has launched the Maori Business Growth Support programme, which is focussed on skill-building and knowledge enhancement of the Maori entrepreneurs, who are owners of small and medium-sized enterprises.
They provide mentoring and sometimes funding to help with the expenditure on business support services received from private service providers. The Maori entrepreneurs also have access to the Maori Innovation Fund, which gives yearly funding to Maori Trusts.
The Ministry of Social Development is involved in offering grants through its Work and Income unit. The unit has a ‘Self-Employment Start-Up Payment’ fund for those availing the benefits. The highest amount to be paid is $10,000, which is spread over the course of 52 weeks. This contribution is made in the form of cash which can be utilised for various expenditures like equipment, stock, website development, legal expenses, marketing costs, business insurance and more.
Also, there are benefits like ‘Business Training and Advice Grant’ which provides an investment of up to $1000 for more than a year to get an expert’s services for skill training, advice, planning, etc.
Entrepreneurs who have a new business idea or wish to launch a venture can register online for the ‘Start-Up Mentoring Programme’ offered by the Business Mentors New Zealand agency. The agency has experts who are skilled in evaluating a business idea and helping a business take shape. The six-month-long programme involves the expert working along with the entrepreneur to provide advice, guidance, aid in creating an effective business plan and evaluating the viability of the business.
If you are looking for businesses for sale in New Zealand, you must be aware of all these grants to get the required funding. The best way to find out about these grants is to rely on the information provided on government websites. Do not get duped by funding scams. To keep things clear, you can refer to this article whenever required.