Finding money to grow your business

There are many solutions to raise capital, not all involve a loan.


Many businesses need to raise extra capital or funding at some stage in their growth.

The first task is figuring out how much you need, and what it’s for. For example, you could be aiming to increase capacity by investing in new equipment or expanding your facilities. Or you might be planning to buy a competitor. Whatever the reason, the first part of your business case is to clearly define the reasons you need extra capital. Once you’ve done that, you’ll have a clearer idea of just how much you’ll need, and whether it’s justified.

First, raise internal cash

Once you’ve determined how much you need, can you find the cash internally? For example, selling equipment you don’t often use (and leasing it when you do need it), cutting down on travel expenses, reducing the amount of personal withdrawals you’re making, or re-negotiating deals with suppliers for better terms.

You’ll be surprised at how much all these savings can add up, generating more cash in the business that can be used to reinvest in business growth. Consider these other internal strategies:

  • Convert working capital to cash by reducing any inventory or materials you’re holding.
  • Use invoice financing (also called factoring) where a financing company pays you immediately for invoices sent (less their commission), saving you chasing payments.
  • Pre-sell to generate immediate cash where customers will pay you now, yet you deliver later.

Don’t forget to focus on sales. It’s the obvious way to bring more cash into the business. Go as hard as you can to bring in new business.

Second, investigate bringing external funds into the business

There are a range of funding sources to explore that could suit your business situation. They are not a silver bullet, all with their pros and cons.

Angel investors and venture capitalists

An alternative to borrowing is to find people wanting to invest in smaller businesses. They could be existing business partners, suppliers, other successful business owners (usually with experience in your industry), or through official channels as ‘angels’ or venture capitalist firms. Both will most likely want a share of your business, which can complicate how you manage the business going forward.

You need to be ready to discuss your business’s financial projections, its current and potential value, your competitors, any protection you have over your products or services, and how you want to structure a deal with an investor. Make sure you have all your paperwork in order such as your accounts, IP ownership, and contracts with staff and suppliers. 

Examples of existing networks:

There are many others. Get professional help when deciding to raise capital. If your business is in a fast-growing industry with a large market potential, you may just catch the eye of an investor.

Government grants and subsidies

It’s always worth checking out what the government can offer who create programmes to help New Zealand businesses grow, though often it’s either export focused or industry led (such as tourism or agriculture). Other constraints tend to include spending grant money only on approved projects or costs, and you may need to match any funding (usually 50/50).

Some examples:

  • Ministry of Primary Industries. Rural funding and support includes climate change, farming, fishing and aquaculture, food and fibre sectors, Māori agribusiness, disaster and crisis support, integrated farm planning, and regional economic development.
  • Te Puni Kokiri. This government department partners with other agencies to provide specific business support and connect with regional Māori business networks.
  • Regional Economic Development and Investment Fund. Helping areas outside Auckland, Wellington and Christchurch with targeted funds so each region can develop their own strategy. Find out more from the Grow Regions website.
  • Callaghan Innovation. Funding, advice, networks, learning and support for businesses that have the capability to scale and build future wealth for New Zealand Inc.
  • New Zealand Trade and Enterprise. Designed to help New Zealand businesses export, products and services. 
  • Regional business partners. These organisations are in all the main regions in New Zealand, with help to identify what support is available (navigating all the above). Find the local contact details of your Regional Partner here.

Please ask your business network (colleagues, financial advisers and your banker) for further advice and insights about government funding. 

Find out more about Small Business Grants and Subsidies in New Zealand.

FFF (friends, family, and fools)

We need to mention the three ‘F’s which can be a legitimate source of funds. Often friends and family are there to support you financially as you get started. Take care if you need further funds however, if the business doesn’t go the way you planned, it can get very messy and distracting. 

The best strategy is to treat friends and family as a sub-set of an angel investor so write up agreements and get professional advice.

Collaboration and partnerships

Strategic partnerships can sometimes provide the end result of what the cash injection was for. A good example, if you needed $500,000 to set up in a new market and employ local sales people, an alternative is finding a business that will on-sell your product or service, that’s already in market. 

Other examples of collaborating instead of needing a loan include:

  • New product or service research and development.
  • Using another businesses spare capacity to save buying extra equipment or space.
  • Promotional discounts or bundling products and services together.

Identify possible business partnerships that demonstrate complementary capabilities to add value to your company, whether that's marketing, licensing, supply chain and distribution, technology, or research and development.

Find out more on how to develop a Strategic Partnership.

Next steps

  • Take as many steps as you can to find the money you need internally before seeking external funds.
  • Contact your local regional partner to explore all the free local and national funding you may be eligible for.
  • Seek professional help if you decide to go down the path of raising capital in exchange for your hard-won equity.
  • MBIE have developed a Funding Explorer Tool on the website. You can self-select your specific circumstances (how much you need, what for, cash reserve limit) and receive personalised funding recommendations.

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