Five companies are in the running for a share of $1 million in growth funding to fast-track their business prospects.

Coffee roasters AllPress Espresso, biological research software Biomatters, payment management software Monitor Business Machines, smart water meter technology Outpost Central and hot water heating control technology Senztec have been announced as finalists in the University of Auckland Business School Entrepreneurs' Challenge.

The challenge kicked off with $3 million in funding from expat businessman Charles Bidwill and aims to accelerate business success by providing a mix of mentoring, funding and a profile boost to growing companies.

Investment committee chairman Brian Hannan said there were several close calls in narrowing down more than a dozen companies from the initial cut of entrants to the final five.

"It's been a very difficult process to select five to go forward."

Hannan said not making the cut was in no way a negative reflection on the companies and what they aspired to achieve.

Chief executive of business incubator The Icehouse Andy Hamilton is assisting the final selection.

He said the final five represented "very squarely" the ethos of the challenge.

"They're all exporters, they presented their objectives and plans very effectively, they're very realistic."

The finalists undergo an extensive due diligence process including presentations to the high-powered investment committee and visits to each of the businesses.

Bidwill, who was linked in the 1980s and 1990s with Ceramco, Bendon, Baycorp and Steel & Tube, made the $3 million gift to the University of Auckland Business School to create an evergreen fund aimed at boosting entrepreneurship in New Zealand.

"The nature of the challenge is we become partners with them in the execution of their business plansfor the next three years," saidHannan.

"Our loan is a facility to help them achieve their plans and as such we take a risk and they acknowledge the risk in terms of providing security for the loan."

Hannan said there might be more than one winner. The final decision will be revealed at a ceremony early next month.