More than a third of small to medium enterprises do not have an online presence, despite many seeing the benefits of the internet.
Independent research commissioned by Yellow shows 34 percent of SMEs are not online, and the year-on-year digital growth remains sluggish.
That is despite more than two-thirds agreeing that small businesses that are online are more likely to survive an economic downturn.
Yellow chief executive Tracey Taylor said a lack of understanding was a barrier, and small businesses needed support.
"Another key factor that the report also highlights is the issue of limited budget. So with 69 percent of SMEs reporting no marketing budget or less than a $1000 a year at their disposal.
"I think now is the time to come together to give SMEs real and tangible support, we need to move quickly and focus on building confidence."
Taylor said grants would provide a big help to SMEs wanting to go digital.
In other findings, the research also showed just 21 percent of SMEs affected by COVID-19 are reporting back to normal status.
It found 79 percent were struggling to get back to pre-Covid business levels.
Taylor said in the same way the country was talking about the 90 percent vaccination project, it needed to talk about the "79 percent project".
"It may appear that New Zealand has had a long period of relative normality between last year and this most recent lockdown. But for the SME community, this isn't the case, the impact of every lockdown is long felt and recovery is slow. The SME community needs a voice, and that need is urgent."
RNZ
