THE BUSINESS DEVELOPMENT INVESTIGATION GRANT SCHEME

What is the Business Development Investigation Grant Scheme?

The Business Development Investigation Grant (BDIG) scheme is one part of the Government’s Business Development Programme.

The BDIG scheme provides grants to assist applicants investigate the feasibility and/or viability of new projects. It does not provide assistance to establish a business. The overall aim of the scheme is to ensure that business ideas/proposals are thoroughly researched. Once an applicant has done this they should be better placed to obtain commercial funding to establish their business.

The scheme has been designed to stimulate innovative and economically viable businesses throughout New Zealand; businesses which will fully realise the potential of the resources and development opportunities of each region.

The scheme is run by a New Zealand wide network of 21 Business Development Boards.

What Does The Scheme Offer?

The BDIG scheme helps with the costs of investigating the technical and commercial aspects of a new project. The scheme is available throughout New Zealand and offers 50 percent of approved investigation costs to a maximum grant of $20,000 per project. Previous assistance under the now terminated RDIG and NBIG schemes is taken into account in determining a project’s maximum grant.

Maximum benchmarks apply to horticultural and livestock investigations, these are outlined in the appendix to this pamphlet.

Who Can Apply?

Any individual, business or organisation resident in New Zealand and registered for either income tax or GST purposes (ie based in New Zealand for the purposes of tax) meeting the following criteria is eligible to apply:

• The project must be a lawful activity;
• The activity must be new to the region in that its technical feasibility and/or commercial viability has yet to be established in the region.

Assistance to local authorities is only available to help them investigate projects outside their normal scope of activities. Government departments are not eligible.

Assistance is not available for any activities directed at the Australian or South African markets.

Which Costs Qualify?

Costs which directly relate to the investigation may qualify but not costs which would be incurred by the applicant in the normal course of their business or those which relate to the establishment of the project.

Qualifying costs include:

• Fees of professional advisers hired for the investigation (legal, accounting, engineering, marketing etc)
• Tools, tax and postage costs
• Power which is separately metered
• Cost of hiring or leasing of plant and equipment
• Pilot plant costs
• Trial planting costs
• Overseas and domestic travel and accommodation costs - up to a maximum of $10,000 thereby giving a maximum grant component of $5,000
• Materials for construction of prototypes.

Note: Overseas travel is only available for projects which involve the investigation of technology transfer to New Zealand

Some qualifying costs may have a residual value applied to them. This is applicable only to items which are on a larger scale than necessary for an investigation. The value is determined by assessing the likely market value of the relevant items at the conclusion of the investigation.

Where sales are to be made during the investigation 75% of estimated revenue is deducted from eligible costs.

Where individual consultant’s fees are in excess of $5,000 (grant of $2,500 or more sought) the applicant MUST attach:

• evidence that competitive bids have been sought; OR
• an explanation of why competitive bids have not been sought.

Note: Boards have the discretion to require applicants to provide competitive quotes for fees below this $5,000 level; if Boards exercise this discretion they must explain their reason(s) for doing this.

Which Costs Do Not Qualify?

Examples of ineligible costs are:

• The applicant’s own salary/wages/fees, those of existing employees, those of parent/subsidiary/associate companies, those of immediate family members, and those with any pecuniary interest in the project
• Debt servicing
• Capital items not directly associated with the investigation