How Do I Fund a Small Business in NZ? A Complete Guide

Any business owner knows, capital is key for a new venture. If you’re looking for help to fund a small business, Canstar has got you covered. Keep reading for our guide on establishing capital.

You’ve recognised a gap in the market and got a solid business idea. But there’s one minor problem: you need help with start-up costs. It’s a good idea to start with a business plan, as it will outline your start-up and ongoing costs, as well as your estimated revenue. Once this plan is in place, and you have an idea of the capital you need, you can start thinking about your funding options. Canstar has compiled a list of some of the places to start if you want to fund a small business.

How Do I Fund a New Business? In this story, we cover:

Grants on offer: Work and Income NZ grants for new businesses

Flexi-wage for self-employment

If you’re out of work and want to start your own business, the government may be able to support you and help with costs while you get started. If you don’t have a business plan, they can advise on your business idea and how to create a plan.

The Flexi-wage self-employment scheme includes $600 a week over 28 weeks, totalling $16,800. It can be pro-rated for those pursuing self-employment part-time who do not have full-time work obligations. Also, you may be able to get a Business Training and Advice Grant of up to $5000.

You might quality if you’re:

  • Out of work, and
  • Aged 18 or older and not qualified to receive NZ Super, and
  • Disadvantaged in the local labour market, and
  • Are able to meet the residency criteria

Self-employment start-up payment

If you’re starting a business and need help with essential start-up costs, e.g. furniture or your initial stock, the government might be able to help. 

It can cover things like, for example: setting up a basic website, equipment and materials required for the business, renovation of business premises, or one-off start-up costs, such as connection fees for power, phone and internet.

You might quality if you’re:

  • Out of work, and
  • Aged 16 or older and not qualified to receive NZ Super, and
  • Disadvantaged in the local labour market, and
  • At risk of likelihood of long-term benefit dependency (this usually means you are getting a benefit or you qualify for one), and
  • Able to meet the residency criteria.

Find out more about the self-employment start-up payment here.

Callaghan Innovation Funds

Ārohia Innovation Trailblazer Grant

The Ārohia Innovation Trailblazer Grant provides funding for activities involved in creating world-leading innovation that can help transform Aotearoa New Zealand’s innovation ecosystem. There are two grants on offer:

  • Ārohia Seed Grant: if you’re not quite ready to shoot for the top tier funding and trailblazer title yet, receive up to $25,000 to help you advance your innovation, and prepare to apply in the future for the Full Grant
  • Ārohia Full Grant: receive up to $4 million to help take your innovation to market

Funding available under both grants is provided on a co-funded basis. This means you must also contribute towards the costs of eligible activities.

New to R&D Grant

The New to R&D Grant provides up to 40% of both the cost of your proposed R&D activities and Capability Development activities, up to a maximum of $400,000, helping to set you up for long-term success.

As a first step, your business must:

  • Your business is an eligible entity
  • Your business must not have received any government funding for R&D greater than $5,000 in the three years prior to the date of submission of your application
  • Your business must have spent less than $50,000 in total on R&D over the three years prior to the date of submission of your application
  • You must be able to fund your share of the R&D costs

Deep Tech Incubators

The Deep Tech Incubators Fund provides long-term backing and investment to launch your Deep Tech venture.

Successful applicants get a minimum of $1 million in funding – $750,000 of which is a repayable grant – to help cover costs associated with commercialising their technology:

  • A minimum of $250,000 privately funded – from the Incubator you’ve partnered with
  • $750,000 publicly funded – coming from Callaghan Innovation in the form of a repayable grant

You’ll only start making repayments – 3% of annual revenue – when your venture starts earning revenue, however long that may take.

If the research and development (R&D) that you’re undertaking is eligible, you can also claim a tax credit worth 15% of the overall eligible cost.

To qualify for full funding and Incubator support, you need to prove that you:

  • Have a Deep Tech, novel and complex IP proposal with significant scientific or technical advancement
  • Have a credible project plan, commercialisation plan and budget, and the Incubator must have allocated adequate resources to support the venture
  • Are consistent with your chosen Incubator’s overall strategy and specialty area

Callaghan Innovation also has a customer support page where you can get in contact with a Callaghan Navigator who can recommend which grant/product would be suitable for you.

Not-for-profit Rātā Foundation Grants

Rātā Foundation offers grants for not-for-profit (NFP) organisations in four regions in the South Island, including areas in Canterbury, Nelson, Marlborough and the Chatham Islands. The grants are designed to support operating costs and/or projects costs, which might be salaries, rent, power, phone or administration costs. To find out if your organisation is eligible, check out their what we fund page.

What about funding a business myself? Personal funding

Have a substantial nest egg, or eager-to-help family members? Plenty of new businesses start out closer to home, self-funding using personal savings, or by getting friends and family on board to invest.

But be aware that this kind of financing still needs to be managed professionally. And perhaps even more so, if personal relationships are involved. Don’t let money and miscommunication ruin any friendships or family ties. Ensure the terms of any business loan or equity stakes are agreed upon and documented.

Borrowing against the value of your home

If you have enough equity in your home, you may be able to borrow money against it. How does it work exactly? If you’ve been in your house for several years, it’s likely to have increased in value. Plus, you will have paid off a chunk of your initial mortgage. You can then use that equity to take out a second mortgage on your home, or refinance. That extra money can be used to fund your business venture. 

If refinancing your home is an option, Canstar can help you compare home loans. Our free and easy-to-use comparison tool covers all the major players in the home loan market. Not only does it help you quickly and easily find the products with the lowest rates, it also shows which lenders and mortgages have earned Canstar’s prestigious Star Ratings, awarded on the basis of our expert analysis.

To read more about our five-star home loan awards click here, or to compare rates using our free mortgage comparison tool hit this button:

Compare home loan rates for free with Canstar!

Outsource your funding: banks and angel investors

To fund your start-up, you can always just apply for a bank loan. However, most generally require proven and sustainable cash flows before they’ll lend to fund a new business.

Angel investors are also a great idea to explore. These are high-net-worth individuals or groups that provide capital to new and ambitious businesses they see value in. Usually, in return for funding, they take an equity stake in your business.

The Angel Association New Zealand lists its members on its website. Look for those in your local area. You might be surprised who’s there to help.


And, of course, if you want to fund a small business, there’s always good old crowdfunding. This can work extremely well if you have a niche or unique idea with a human aspect to it, or it’s tackling a big gap in the market.

As well as raising funds, the added benefit of crowdfunding is that it can help you generate a passionate and invested customer base without doing too much marketing. Know that running a successful campaign, though, on platforms like Boosted, is a lot of work. You can’t just sit back and wait for donations. 

Small business already set up?

Banks play a key role in the success of most new small businesses, both in terms of funding, managing day-to-day cashflow and advice. So how satisfied are you with your bank? And is it the best one for your small business needs?

The Canstar Bank of the Year | Small Business Award recognises the institution that provides the strongest combination of business banking products, as well as excelling in a range of institutional factors and quality service to small businesses.

To discover more about the winner of our latest Bank of the Year | Small Business Award, ANZ, just click on the button below:

Bank of the Year | Small Business Award

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a Search Engine Optimiser, before joining the Canstar team.

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