Business Grants and Assistance Legal Guide 2 0 1 5 NEW PLYMOUTH 1 Dawson Street Private Bag 2013 Phone (06) 768-3700 Fax (06) 768-3701 INGLEWOOD 92 Rata Street PO Box 28 Phone (06) 756-8118 Fax (06) 768-3701 WELLINGTON Level 4, City Chambers 142 Featherston Street Phone (04) 282-0899 www.thelawyers.co.nz Find us on Facebook LinkedIn Twitter
Contents Introduction... 1 Callaghan Innovation... 1 R & D Growth Grants... 1 R & D Project Grants... 1 R & D Student Grants... 2 Global Expert... 3 International Growth Fund... 3 Agricultural and Marketing Research and Development Trust... 4 Agribusiness Innovation... 4 Work and Income New Zealand... 4 Business Training and Advice Grant... 5 Poutama Trust... 5 Putea Kimihia: Business Investigation Investment... 6 Putea Whakaako: Business Training Investment... 6 Putea Tipuranga: Business Growth Investment... 6 How we can help you... 7
Introduction Financial resources are essential when establishing or expanding a business. There are a number of grants available to businesses and often the biggest problem is knowing where to find the right information. This guide outlines what grants and assistance are available, how much can be obtained, eligibility criteria and the application procedure. The details contained in this guide are for reference only and are current as at January 2014. Callaghan Innovation Callaghan Innovation administer more than $140 million a year in business research and development (R&D) funding, designed to help accelerate innovation by firms in New Zealand. The R & D Growth Grants, R & D Project Grants and R & D Student Grants replace the previous TechNZ Project Funding, TechNZ Expert Funding, Technology Development Grants and the Technology Transfer Vouchers. R & D Growth Grants The R & D Growth Grants are designed to increase R & D investment in businesses with a strong track record of R & D spending in New Zealand. Amount The grants provide 20 per cent public co-funding, for qualifying firms eligible R & D expenditure, up to $5 million a year. Eligibility Eligible R & D expenditure is that which meets the definitions of research and development below: Research is original and investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Investments will be made in a range of companies, from start-ups to mature organisations. Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use. Procedure R & D Growth Grants are an on-demand process over a three year period. To apply for an R & D Growth Grant, contact Callaghan Innovation on 0800 4 CALLAGHAN (0800 422 552). R & D Project Grants R & D Project Grants are primarily targeted at businesses that do not receive R & D Growth Grants. These grants support firms with smaller R & D programmes and those that are new to R & D. Amount These grants typically provide support of 30 to 50 per cent of eligible R & D costs. 1
Eligibility These projects must lead to business growth and export potential. In addition to complying with general eligibility criteria, you will be asked the following questions: 1. What are the potential commercial returns to your business? 2. How well will you be able to commercialise or implement the results of the project? 3. Will your business be able to successfully deliver on the technical aspects of the project? 4. Will the project be a technical stretch? To what extent will it help your business develop an ongoing R & D programme? 5. What impact will grant funding have on the delivery, scale, quality or commercial success of the project? 6. To what extent will other New Zealand firms or society benefit from this project? Procedure 1. Go to the Callaghan Innovation website www.callaghaninnovation.govt.nz/funding/rd-project-grants to download and fill out a spreadsheet to calculate your business s eligible overhead rate. It is recommended that you view the sample Funding Agreement for an R & D Project as well. 2. The next step is to request an application for a Project Grant. Contact Callaghan Innovation on 0800 4 CALLAGHAN (0800 422 552). Alternatively, you can contact your nearest Regional Business Partner (Venture Taranaki). R & D Student Grants R & D Student Grants provide support for New Zealand undergraduate and postgraduate students to gain and develop their technical skills in a commercial R & D environment while bringing capability into New Zealand businesses. Amount These grants are limited to wages and salary of the student, a stipend for the student, a tertiary administration fee and, when the business is located a significant distance from the tertiary education institute, a travel allowance for the student. Eligibility In addition to meeting the general eligibility criteria for R & D grants, for a business to qualify for an R & D student grant, it must: Have an active R & D programme. Ensure that the student (s) that the grant relates to: Additional considerations: 1. Is a science, technology, engineering, design or business student from a tertiary education institution; and 2. Is studying a degree at NZQA levels 7 to 10 or equivalent; and 3. Has appropriate immigration status at the time of application (or an application in progress that is subsequently approved). Will the student gain technical R & D experience that is relevant to their degree? How will your business support the student s professional development? How will the involvement of the student support the development of your business internal capability? 2
Procedure Invitations for businesses to apply for internships (for both undergraduate and postgraduate students) for 2014/2015 will be open in April/May 2014.To apply, contact Callaghan Innovation on 0800 4 CALLAGHAN (0800 422 552). Global Expert Global Expert is a search service that connects New Zealand businesses and organisations with experts to help them solve technical and market related challenges. Global Expert uses a network of more than 20,000 New Zealand and international experts from leading universities, research institutions and companies around the world. What do I get? You will receive a search report within 15 working days that includes a list of pre-qualified experts, capability summaries, contact details and supporting information. You need to be a New Zealand business or organisation that needs expert help to solve technical and market related challenges. Procedure Contact a Global Expert Specialist by calling 0800-GET-EXPERT (0800-438-397). International Growth Fund If your business is working on an activity with the potential to deliver benefits to New Zealand s economy, you may be eligible for funding through the International Growth Fund. The fund is targeted at businesses working closely with New Zealand Trade and Enterprise ( NZTE ) on a plan to help them develop and grow. These are businesses that NZTE has assessed as being most likely to contribute to New Zealand s long-term growth, including through success internationally in the short to medium term. How much can I get? This depends on the level of global experience the business carrying out the activity has, and their potential to contribute to New Zealand s long-term economic growth. Between $100,000.00 and $1 million of matched funding over five years is available for businesses who are more likely to contribute significant benefits to the New Zealand economy. Between $20,000.00 and $500,000.00 of matched funding over five years is available for businesses considered to have high growth-potential. For more details see http://www.nzte.govt.nz/find-funding-assistance/pages/ international-growth-fund.aspx. If a potentially eligible activity is identified, the NZTE account manager will carry out a pre-assessment to determine eligibility before inviting a business to participate. Once invited to participate, the business will need to provide sufficient information about the activity to support the development of an internal NZTE business case that is used for the funding assessment. Procedure There is no formal application form for funding. 3
Agricultural and Marketing Research and Development Trust The Agricultural and Marketing Research and Development Trust ( AGMARDT ) was established by the Crown to promote and encourage the agricultural, pastoral, horticultural and forestry industries through the administration of grants programmes. The previous Progressive Farming and Industry Support Programmes have been replaced by the Market Driven Farming Innovation Programme, which is used to help a new industry in its initial stages, to assist emerging producer organisations and to implement marketing initiatives. Agribusiness Innovation The aim of this programme is to provide seed funding for primarily farmer/grower groups to develop and evaluate innovative ideas to a stage where they can be applied or attract other funding for further development or commercialisation. For further information and to download application forms visit http://www.agmardt.org.nz. How much can I get? There is no set grant level but most grants will be in the $30,000.00 to $120,000.00 range. Farm/industry support in kind and cash equating to at least 40% of the total project costs is required as an indication of commitment to the project. However, grants of up to $20,000.00 are available without co-funding for preliminary investigations or demonstration purposes. Application process Selection process involves two stages: 1. The applicant submits a project inquiry; and 2. If you are successful at stage one, you will be contacted by an advisor in relation to submission of a grant request. Applications are called for three times a year (30 April, 31 July and 31 October). Work and Income New Zealand Work and Income New Zealand ( WINZ ) is a government department whose role is to help people find work and to provide income and support to people who need it. For advice and application forms contact WINZ on 0800-559-009 or visit http://www.workandincome.govt.nz/documents/start-your-own-business.pdf. You may be eligible if: You or your partner are getting financial help from the Government (there are some exceptions); You have a good business idea; and You cannot meet the costs of starting the business yourself. Flexi-wage The flexi-wage allowance is to help you get started in business. There are two types of allowances available a subsidy and a grant. 4
Flexi-wage allowance subsidy Helps eligible unemployed people start their own business. It is a short-term allowance to help with costs while you are getting started. It is paid every four weeks (you need to fill in a form every month). Flexi-wage allowance grant Helps eligible unemployed people start their own business. The grant is one-off payment at the start to help with set up costs, such as buying furniture or the first lot of stock. The flexi-wage allowance grant can be used for the purchase of plant and equipment required for your business, the purchase of initial start-up stock for your business, to buy materials required to produce goods for your business, to enable renovation of premises to facilitate the start of your business or to meet one-off start-up costs. Business Training and Advice Grant Helps towards the cost of training and advice you need to run your business, such as training in management, marketing, time management, or customer service. You could also use it if you need the help of a business advisor to write your business plan for instance. How much can I get? Funding of up to $1,000.00 (including GST) per person per project is available. How can I use the award? The grant can be used to pay for business skills training, the development of a business plan, business advice before and during the start-up period of your business, an independent vetting report and a midproject financial report. Application process You need to fill out the form called Grant Request for Training / Professional Advice to apply for such a grant. Poutama Trust The Poutama Trust is a charitable trust set up in 1988 to provide business related services to Maori. The Trust invests income from its capital base to develop activities that encourage Maori business development and success. Three categories of business development grants are available. For more information on the investment options, and to download guidelines and application forms visit www.poutama.co.nz Any business development grant will only be approved if the Poutama Trust assesses proposals as commercially viable and funding cannot be obtained from other sources. Any Maori organisation or Maori individual seeking to be in business or already in business is eligible to apply. Organisations with non-maori ownership will only attract funding in proportion to the Maori ownership. To qualify for the full amount a business must have at least 51% Maori ownership. Businesses that have total assets of $4 million and an annual turnover of $2 million and those with an annual turnover of less than $60,000.00 are 5
unlikely to be considered for funding. For organisations that deliver government services such as health, social and education, the Trust may consider funding up to one third of costs. Putea Kimihia: Business Investigation Investment This investment aims to enable businesses to investigate innovative ideas to help strengthen and grow existing business activities. How much can I receive? Putea Kimihia covers 50% of business investigation costs. To qualify for overseas market research and travel: You must already be in business and be export/import capable; and Market research must indicate that overseas travel is needed to secure that market. What can the funding be used for? Examples of business development services and products covered include: Offshore market research and visits, international trade missions and expos; Provisional protection of intellectual property rights; Feasibility studies, prototype development and concept design. Putea Whakaako: Business Training Investment This investment is targeted at increasing the capabilities and capacity of existing businesses to enable them to gain relevant skills or management support. How much can I receive? Putea Whakaako invests up to a maximum of $2,000.00 per business owner. Payments for training courses by any one provider are limited to $10,000.00 per year. You must be an existing business requiring relevant skills or management support. What can the funding be used for? The investment cover, but is not limited to: Short, business-focused courses for business owners; and Management support work by independent advisers or experts. Putea Tipuranga: Business Growth Investment Putea Tipuranga funding for growth of existing businesses can be used to purchase products and/or services to help with your business growth, but only those that are industry specific and over and above normal business operational costs. How much can I receive? This funding covers 50% of costs up to a maximum amount of $10,000.00, per year with a lifetime maximum of $60,000.00 6
To be eligible for this specific funding you need to: Have operated at least 12 months and have a turnover of at least $60,000.00; Produce a business plan; Demonstrate that you cannot get access to investment from other sources, for example banks or private investors; Show how receiving the investment in industry-specific products and/or services is essential to your business operation; Show how the investment would assist your business to achieve growth and sustainability. 7
How we can help you Govett Quilliam is Taranaki s largest law firm. We have the people, the experience and the resources to assist you, whatever your case may be. Hopefully this guide has provided you and your business with an idea of just how many grants and assistance programmes are available. There are a number of different avenues open to you depending on what stage your business is at, what your business focus is and even depending on your annual turnover and profit. This guide is by no means intended to be exhaustive. If you require further information, or have any questions about this guide please contact us. Our partners with experience in business grants and assistance are: Ross Fanthorpe Partner Geoff Shearer Partner DDI: (06) 768-3729 DDI: (06) 756-8118 Ross.Fanthorpe@gqlaw.co.nz Geoff.Shearer@gqlaw.co.nz Paul Franklin Partner Paul Anderson Partner DDI: (06) 768-3731 DDI: (06) 768-3732 Paul.Franklin@gqlaw.co.nz Paul.Anderson@gqlaw.co.nz Please call our office if you would like further information on any guides prepared by our firm. Copies are also available on our website. Asset Protection and Residential Care Subsidies Business Grants and Assistance Buying or Setting Up a Small Business Charities Companies Act 1993 Consumer Guarantees Act 1993 Credit (Repossession) Act 1997 De Facto Property Rights Employment Enduring Powers of Attorney Fair Trading Act 1986 Family Trusts Flexible Working Arrangements Franchising Health and Safety in Employment House Buying and Selling Immigration Insolvency and Bankruptcy Intellectual Property and Copyright Law Liquidations and Receiverships Securing Money Lent over Personal Property Subdivisions Traffic Offences and Breath Testing Procedures Wills and Estate Administration All information in this guide is the best of our knowledge true and accurate. No liability is assumed by Govett Quilliam or its partners, or publishers, for any losses suffered by any person relying directly or indirectly upon this guide. It is recommended that clients should consult a representative of the firm before acting upon the information contained herein. 8