Running out of cash is the second biggest reason that startups fail. Therefore, ensuring that your cash reserves are robust is critical to the survival of your business. This means founders not only have to manage costs diligently but should also make sure they are aware of more creative income sources like funding and grants.
Fortunately, New Zealand is a very startup-friendly country and there are many initiatives and government-backed funds available for early-stage startups. This is by no means a complete list but the below organisations are a great place to start:
- Flexi-wage for self-employment by WINZ
- Self-employment Startup Payment by WINZ
- Getting Started Grants by Callaghan Innovation
- Project Grants by Callaghan Innovation
- R&D Tax Incentive by Callaghan Innovation
- Not-for-profit Grants by Rātā Foundation
- Student Grants by Callaghan Innovation
- Business Training and Advice Grant by WINZ
- The Capability Voucher Funding
Flexi-wage for self-employment is designed to support people who are starting up a new business or needing help to become self-sufficient in an existing business. The maximum subsidy you can get is the minimum wage of 30 hours a week for up to 52 weeks. You can find out about the grant on WINZ Flexi-wage for self-employment website.
Self-employed Startup Payment by Work and Income NZ is applicable for those who are starting a new business or need help to become self-sufficient in an existing business. This grant is not available if you’re currently bankrupt or re-starting a business you’ve owned before.
You can get a maximum of $10,000 in a 52 week period and get paid for different types of expenditures like equipment required for business, startup stock, materials, lease, insurance, advertising, etc. Find out more about the Self-employment Startup Payment.
Getting Started Grants are designed to provide funding support to companies with a focus on research and development. The aim is to kick-start innovation and help take your product, process or service solution from development through to commercialisation. Your business can receive 40% of eligible R&D costs, up to $5,000.
The Getting Started R&D grant aims to help founders begin their R&D activities and navigate through R&D roadblocks to create a competitive edge.
Learn more about the Getting Started Grants by Callaghan Innovation.
Project Grants are designed to help businesses enhance and expand R&D capability. Similar to the Getting Started Grant, you can receive 40% of eligible R&D project costs, even when your business has had multiple grants. Project Grants aim to help build and improve new products and develop your business into a stable and substantial R&D performer. This grant is only eligible for R&D done in New Zealand.
The R&D tax incentive by Callaghan Innovation is a scheme designed to help NZ businesses enhance and expand their R&D capability. The minimum R&D expenditure threshold is $50,000 per year. The initiative includes a credit rate of 15% with a $120 million cap on eligible expenditure. Callaghan Innovation is currently working with Inland Revenue to help you determine if your R&D is eligible. Use the R&D Tax Incentive eligibility tool to find out if you’re eligible. You can also read Inland Revenue’s guidance to understand eligibility and record-keeping requirements.
Rātā Foundation offers grants for not-for-profit (nfp) organisations within four regions in the South Island New Zealand, including areas in Canterbury, Nelson, Marlborough and Chatham Islands. Grants are designed to support your operating costs and/or projects costs, which may include salaries, rent, power, phone and administration costs. Nfp organisations can apply any time during the year, but will only receive one grant in each financial year (1 April to 31 March).
To find out if your organisation is eligible, go to What we fund page on their website and look through the priorities list for different funding areas. Then choose an area that best fits what your organisation is trying to achieve.
Student Grants give your business access to fresh talents and ideas and boost your R&D capability while helping undergraduate and postgraduate students to gain and develop technical skills in a commercial environment. There are three types of student grants:
- R&D Experience Grant is a 10-week internship during the student’s summer break or at the completion of the student’s study. The student is expected to help your organisation with an R&D project.
- R&D Fellowship Grant provides funding support for students undertaking a PhD or master degree, which is aimed at solving a technical or scientific problem for your business.
- R&D Career Grant is an internship designed to provide 6-month employments for recent PhD or master graduate students.
Learn more about how the Student Grants works.
Business Training and Advice Grant can help you with developing a business plan, training in business skills, advice and project reports. You may be able to get a Business Training and Advice Grant if:
- you or your partner are getting the main benefit, or
- you qualify and have applied for the main benefit
- you’re getting New Zealand Superannuation or a Veteran’s Pension as a non-qualified partner
- you’ve asked WINZ for help to start your business
- you’re planning to take up, or are already getting, Flexi-wage for self-employment for the same business.
The Capability Voucher Funding helps business owners to access business training and coaching services, by providing them with up to a 50% subsidy towards the registered service cost. You can meet with one of Regional Business Partner Network’s Growth Advisor and work through different areas of your business like Business Planning, Sustainability, Capital Raising, Export, Finance, Governance, Manufacturing, Operations, Resources, and Marketing.
The value of vouchers issued will vary and they can be used to cover up to 50% of the training service cost (capped at $5000 p.a). To be eligible for the funding, your business must have fewer than 50 full-time employees and are registered for GST in New Zealand.
Learn more about the Capability Voucher Funding.
If you’re a Christchurch-based startup who are looking for a home where you can grow, consider joining Te Ōhaka Startup Incubation Programme. We’re looking to work with founders who are starting small but thinking big and moving fast. Find out more at Te Ōhaka Startup Incubation Programme.
Written by Tri Phung – Marketing Manager
I love reading and writing stuff about startups, lean marketing and growth hacking. Connect with me on Linkedin