Business mentor: Government can help with R&D cash

Q. Can you advise if there is any form of research and development funding or expansion of small business funding available in New Zealand?

A. Hans Frauenlob, group manager business development/market services at New Zealand Trade & Enterprise, replies:

One of the biggest challenges facing New Zealand businesses is finding the money and expertise to grow.

Funding research and development (R&D) is especially tough, as these projects tend to be risky and can take a long time to result in a saleable product or service, which puts pressure on your cashflow.

Investing in R&D is critical, as a recent OECD study of high-growth SMEs confirmed. High-growth companies rely heavily on new technologies for managing production, it said, and nearly all use the latest available techniques.

Fortunately the Government can provide some help.

For companies new to R&D, Technology New Zealand offers the SmartStart scheme which allows for grants to cover up to 50 per cent of the cost of using expert advice to prepare for a big R&D project.

Types of activities funded include: assessments of your use of technology, evaluations of available technologies that might suit your needs, and development of a technology/R&D strategy.

SmartStart agents can approve grants of up to $5000 on behalf of Technology New Zealand - a process that may take only 48 hours.

If your innovative R&D project is at the ready-to-go stage, Technology New Zealand offers two alternatives to help you manage the risk of developing new products, processes or services:

* Grants for private sector R&D provide funding from $10,000 to $100,000 to cover up to 33 per cent of the cost of a new R&D project.

* Technology for business growth grants are targeted at projects that deliver high added-value, high-margin, technology-based products, processes and services.

These grants, which may range from $50,000 to more than $2 million, can cover up to 50 per cent of eligible project costs.

Companies must prove they have enough funds to cover their share of the R&D project costs plus full costs of commercialisation.

New Zealand Trade & Enterprise (NZTE) also has a range of services to support growing businesses.

Enterprise Development Grants (EDG) are available to entrepreneurs and companies looking to undertake a significant new activity that will build their business capability.

Successful applicants can receive grants to cover up to 50 per cent of eligible costs to a maximum of $20,000 and on a 50:50 reimbursement basis. The types of activities funded include:

* Business mentoring.

* Management and technology-based training.

* Strategic business development.

* Feasibility studies.

* Product development.

* Some international market development activity.

NZTE also offers support via the Enterprise Training Programme of free workshops and coaching delivered throughout New Zealand.

Topics covered include business planning, compliance, marketing strategies, finance and e-commerce.

Meanwhile, Exporter Education, delivered in partnership with Export New Zealand, offers new exporters valuable training about doing business overseas.

For growing companies looking for early-stage equity investors or strategic partnerships, there is NZTE's Escalator service, which teaches participants about the investment options and their implications and how to become investment-ready.

We recommend you visit the Technology New Zealand website and the New Zealand Trade & Enterprise website, or contact NZTEs Enterprise hotline (0800-555- 888).

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Answers are courtesy of Spring - A State of Mind for Business.