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The North Canterbury Business Awards

Cash to Get Started

You have your business plan together, you know what your startup costs will be, you know what gear you need, you know how much you will be paying in rent and you have a good idea about how long it will take before you start generating an actual income. Now all you need is some money.

Not all businesses need money to get started, but most do and usually it's a decent chunk of cash.

When you are looking at financing your business you are generally looking for money to get the business going, as well as some income to survive on until the business is generating enough cash to support you. Where do you get this money from?

There are a number of options, but it's usually not easy. Below is a list of options that might fit your needs.

This can be a good way to grow for a business that does not have many startup costs. You start small and grow the business as profits allow. This can be a lot safer than borrowing money or getting investment, but it can make it more difficult to grow.

You may have savings, you might sell your collectables, you might use some equity from your house. If you can find the money yourself that is usually the best way to get started. It means you are not beholden to anybody else and you are not paying interest or dividends.

Even if you do use one of the other sources of cash below, chances are that you will need to raise some of the income yourself. Most lenders and investors won’t be interested if you aren’t putting any skin in the game.

When more than one person is setting up the business then you can both bring your resources and expertise into the mix. This can be a great way to get a business up and running, but make sure that you have a solid legal agreement in place. Disagreements will occur and people do eventually choose to move on. You need to have considered ‘worse case scenarios’ before you start formally working together, make sure that your expectations are aligned and that you have a method to deal with disagreements.

If your business partner is also your spouse then you need to be even more careful to set expectations, responsibilities and establish how decisions are made. An unresolved business disagreement can be poison for your home life.

This is a great way to lose friends and destroy family relationships. Make sure your eyes are wide open to what can go wrong if you accept money from family and friends. Make sure everything is in writing. We strongly advise getting legal advice and making sure that peoples expectations are set down from the start. While it can be easier than other methods to get loans or investment from people you know it can also come with misunderstandings and resentment if it goes wrong (or even if it goes right).

If you need to borrow money, make this your top option. Banks require a lot of surety before they will lend you money. They will want to see a well written business plan with a realistic cashflow forecast. They will want to know that you have done the market research and that your plan is viable. Good banks will work with you where they see gaps in your business plan and help you reduce any risk.

However banks usually require security such as an additional mortgage on your house . This reduces the risk to the bank as it means if your business fails and you are unable to pay the loan, then they will take the value from the security you provide. However if you are starting out with no assets to use as security then you could struggle to get the banks on board.

Bank loans are usually low interest (compared to other options) and the bank will not tell you how to run your business day to day. If you are going to borrow money, this is usually the best and safest option.

If you need to go to a finance company to fund your business then stop, take a deep breathe and reconsider whether your business is viable. Finance companies offer easy money with little security at huge interest rates. If you don’t generate the money that you think you will then you will quickly find the interest costs mounting up. In the most part, finance companies are sharks and you are best to stay far away.


If you are willing to give up some of the ownership of your business, getting investors can be a good way to go but it is also difficult to achieve. Generally investors want to put money into either something that is already generating income and is a safe bet, or they want to risk their money in ‘the next big thing’ but own a good proportion of the business in return for the risk they are taking. Investors will want to see that you are also putting your money and resources into the investment – why would they take a risk if you are not.

Investors can provide expertise, experience and access to networks and markets which could make your business much more likely to succeed.

Having investors will have a long term impact on your business as you repay the investment, make sure they get the returns they are expecting and possibly pay part of the profit of the business to them indefinitely. Having an investor on board may give you an initial burst of cash but might negatively impact the long term viability of your business. Some investors will push you to sell your business once it is succeeding in order to maximise their short term return. Make sure you adjust and examine your cashflow forecasts carefully.

If you are looking at getting investors on board see a lawyer first. There are lots of risks with getting other people involved with your business and you want to make sure all the legalities are in order.

Investors will want to be involved in your business, so do your homework on any potential investors and make sure you are clear on what they expect for their investment before accepting an offer



These are generally for tech startups. These are a great method for developing your product and getting it ready for market, while building good connections and getting help from business experts. If you can get involved with an incubator or accelerator then this is a good option. Most incubators and accelerators have good connections with investor networks and can help you raise money.

There are a number of reputable business crowdfunding websites in New Zealand and this can be a good way of raising money for your business. To do it, you create an online campaign featuring your business or product and set a financial target.

Think about why people will put their money into your business. Will you offer product, rewards, shares in the business, permanent discounts? Make sure you factor in how this will affect your cashflow forecast. Crowdfunding is not appropriate if you are sensitive about intellectual property (such as if you are developing a unique product) and you do not want details of your product in the public arena.

If you are looking at using a New Zealand Crowdfunding Service then make sure they are licensed with the Financial Markets AuthoritySnowball Effect and Pledgeme are the most popular New Zealand services.


As a rule of thumb, there are no grants to start up a business. There are a few exceptions to this rule.

If you are on a benefit you may be eligible for assistance from Work and Income to start a business through their Flexi Wage for Self Employment and they might assist you with a Business Training and Advice Grant

If you are Maori or establishing a Maori Business, Te Puni Kokiri offer Maori Business Growth Support

Te Rūnanga Ngāi Tahu offer mentoring and grants for new startups, growing businesses and those thinking of starting a business through their Puna Pakihi programme. Your business must be at least 50% owned by a registered Ngāi Tahu whānau to be eligible.

If you are developing an innovative product then Callaghan Innovation have a range of assistance including research and development grants.

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