Whanganui's John Wilson and Matt Ellingham are early beneficiaries of new seed funding for start-up business ventures in vulnerable communities.

The two have built their SourBros bakery business from supplying a market stall to filling a small shop in Whanganui's Ingestre St and employing two people.

A small amount of money from The Generator allowed them to buy a stainless steel bench and mixer to add to an existing commercial kitchen. Before that Wilson had done all the mixing by hand.

"We were about to open and didn't have any idea how we were going to make it work," Wilson said.

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"Getting that funding made it possible. It was amazing."

Wilson and Ellingham began their bakery business with a stall at the Whanganui River Markets in February 2018. Since mid-2019 their new shop has sold takeaway food, coffee, biodynamic baked goods, fermented breads, pastries, sandwiches, bagels, cookies and doughnuts.

Because the grant from The Generator was a gift, the business started without debt. Ellingham and Wilson have been able to pay themselves a wage and support their families.

They have employed a fulltime barista and another person for one day a week, and are considering opening for longer and restarting their market stall.

"It's nice to be able to provide jobs," Wilson said.

The Generator is a new funding avenue from the Ministry of Social Development and was officially launched in August. Its funding is available in five New Zealand regions, including Whanganui.

It has $700,000 to give away every year, mostly in grants of $2000 to $3000.

Wilson read about it and approached Thrive Whanganui, a charitable trust that promotes social enterprise. He discovered SourBros was eligible for funding because he and Ellingham would both qualify for a Community Services Card, and because they have a good idea.

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Thrive Whanganui employs Paul Fletcher to work with The Generator applicants, director Nicola Patrick said. The applicants also complete tasks online.

Patrick has a list of others seeking Generator funding. They're a varied lot and she's excited by their possibilities.

"It shows the value of a small injection of money at the right time, with a good person on the ground and a good process."