Massachusetts Incentives and Workforce Development Guide

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For a list of Massachusetts economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

 

FINANCING

Brownfields Redevelopment Access to Capital Program (BRAC): BRAC is administered by the Business Development Corporation of New England and offers low-cost, often state-subsidized, environmental insurance to help mitigate risk associated with brownfields redevelopment.

Brownfields Redevelopment Fund: MassDevelopment administers the Brownfields Redevelopment Fund, which helps to transform vacant, abandoned or underutilized industrial or commercial properties. In most cases, redevelopment is complicated by real or perceived environmental contamination and liability. Types of Redevelopment Fund Programs:

  • The Brownfields Site Assessment Program provides unsecured, interest-free financing up to $100,000 for environmental assessment of brownfields.
  • The Brownfields Remediation Loan Program offers flexible loans up to $500,000 for environmental cleanup of brownfields.

Charter School Loan Guarantees: Through the Massachusetts Charter School Loan Guarantee Fund, MassDevelopment provides guarantees for bank loans or tax-exempt bonds financing the acquisition, construction or renovation of charter school facilities located in Massachusetts.

For facilities owned by the school:

  • Loan guarantees cover a percentage of the first mortgage loan up to the lesser of 50% or $3 million.
  • Loan advance rate may be up to 100% of the property value.

For facilities leased by the school:

  • Loan guarantees cover up to the lesser of $1,000,000 or 90% of the cost of facility improvements.

Cultural Facilities Fund: An initiative to increase public and private investment in cultural facilities throughout the state. The program is administered jointly with the Massachusetts Cultural Council 501(c)3 organizations engaged in the arts, humanities or interpretive sciences. All grants must be matched by contributions from the private or public sector. Three types of grants are available:

  1. Capital Grants for the acquisition, design, construction, repair, renovation, and rehabilitation of a cultural facility.
  2. Feasibility and Technical Assistance Grants for the planning and assessment of a cultural facility.
  3. Systems Replacement Grants for 20-year capital needs assessments of buildings and mechanical systems.

Eligible facilities include: museums, historic sites, zoos, aquariums, theaters, concert halls, exhibition spaces, classrooms, and auditoriums. Additionally, these facilities must be:

  • Owned, leased, or used by one or more nonprofit cultural organizations
  • Accessible to the public
  • Public or private institutions of higher education that own cultural facilities that:
    • Provide service and open access to the community and the general public beyond their educational mission
    • Demonstrate financial need

Facilities owned by municipalities must be at least:

  • 50,000 square feet
  • 50% devoted to cultural purposes

Equipment Loan: If your company is expanding operations and needs to purchase equipment, MassDevelopment can help. The equipment loan program offers loans or bank loan participations up to $2,000,000; fixed rate financing; loan terms up to seven years; loan advance rates up to 85% of the cost of new equipment; and exporters may receive 100% financing for new equipment

Exporter Financing: MassDevelopment offers the following programs to help companies that export or anticipate exporting products or services internationally:

100% Export Loan

  • 100% financing for new equipment, leasehold improvements and working capital
  • Loans up to $2,000,000
  • Interest-only payments for the first 12 months
  • Up to seven year term and amortization

Export Loan Guarantees for Banks and Lenders

  • Loan guarantees against losses of up to 90% of the loan amount on export working capital lines of credit up to $1,000,000.
  • The guarantee allows a lender to accept foreign accounts receivable and inventory for foreign sale as collateral.
  • Guarantees on term loans for equipment and other purposes up to 70% of the loan amount or $500,000.
  • With the loan guarantee in place, a bank or financial institution is able to extend more credit.

Export Credit Insurance: With assistance from MassDevelopment, exporters can obtain export credit insurance from Ex-Im Bank. Export credit insurance helps you to get paid and provides your international customers with competitive credit terms.

  • Eliminates most risk of nonpayment by international buyers.
  • Provides credit terms to international buyers that can increase sales.

Manufacturing Planning Loans: MassDevelopment provides Manufacturing Planning Loans up to $50,000 with low interest rates and terms of up to five years. Loans can be used by manufacturing companies to pay for consultant services. Eligible consultant contracts include services to evaluate and improve demand (sales and marketing), fulfillment (operations improvement) and finance and administration (strategic leadership).

Massachusetts Emerging Technology Fund (ETF): Provides start-up or emerging technology companies with financing for working capital, manufacturing facilities and equipment. The ETF offers loans or loan participations up to $2,500,000 and loan guarantees up to $1,500,000. To qualify for ETF financing, you must be a technology company starting or expanding manufacturing operations in Massachusetts, and have strong management teams, demonstrated technical feasibility, market demand for your products and a proven fundraising record. Additionally:

  • Financing must be for the purchase, expansion or improvement of real estate, working capital, and/or the purchase of equipment
  • There must be at least two other parties at risk
  • Financial investment must benefit the Massachusetts economy

The ETF also offers loans to bridge the receipt of federal grants by advanced manufacturing companies:

  • Loans of up to $500,000
  • Payable in full upon receipt of federal grant
  • Deferred and accrued interest due at maturity

Mortgage Insurance Guarantee: MassDevelopment can provide a guarantee on a portion of a bank real estate loan or tax-exempt bond. The guarantee covers the difference between a bank’s maximum allowable loan advance rate and up to 90% of the property value, thereby increasing the amount of financing available to your business. The program offers:

  • Loan guarantees up to $2,000,000
  • Loan advance rates up to 90% of the value of the real estate

Guarantees are also available for charter school loans, tax-exempt bonds, loans to companies that export products to international markets and working capital loans to manufacturers.

Predevelopment Loans: Predevelopment loans can be used to finance early stage project costs, such as architectural and engineering work or traffic and feasibility studies necessary to advance a project to the construction stage. It offers loans up to $100,000 and deferred interest payments. Borrowers are required to provide a 50% match for MassDevelopment loan funds.

Real Estate Loans: Can be used to fund facility acquisition, renovation, construction and permanent financing. The program offers:

  • Loans or bank loan participations up to $7,500,000
  • Construction loans, usually made in partnership with another lender
  • Permanent financing loans
  • Multi-tenant, mixed use, commercial, industrial
  • Manufacturers, small business, nonprofits
  • Rental housing apartment buildings
  • For owner-occupied real estate, loan advance rates up to 90% of the property value

TechDollars: MassDevelopment offers loans from $25,000 to $250,000 to help nonprofit 501(c)(3) organizations located in Massachusetts purchase and install technology equipment. 100% of cost of purchase of new or used telecommunications and information technology equipment, software and related installation costs.

USDA Loan Guarantees: MassDevelopment is an approved lender for the USDA Rural Development Business & Industry Loan Guarantee Program, which helps support job creation and economic development initiatives in rural areas —communities with fewer than 50,000 people and not adjacent to those with populations over 50,000.

Working Capital Loan Guaranty for Manufacturers: Allows banks to make larger working capital loans to manufacturing companies by providing a guaranty of up to 25% of the amount outstanding on a revolving line of credit. The guaranty terminates with the maturity of the line of credit and will be considered for renewal on the same cycle as the bank, but no less frequently than every three years. Term working capital loans may also be guaranteed in a fixed amount equal to no more than 25% of the bank’s loan amount. The guarantee amortizes dollar for dollar with the underlying term loan for up to five years. MassDevelopment charges an annual fee equal to 1% of the guaranty amount as long as the guaranty is outstanding.

 

TAX INCENTIVES

Brownfields Tax Credit Program: The tax credit program is administered by the Massachusetts Department of Revenue and offers eligible businesses and nonprofits a tax credit for the costs incurred to remediate contaminated property owned or leased for business purposes and located in an economically distressed area. Tax credits may be used against state tax liabilities, or transferred or sold to third parties.

Economic Development Incentive Program (EDIP): EDIP is a tax incentive program designed to foster job creation and stimulate business growth throughout the Commonwealth. Participating companies may receive state and local tax incentives in exchange for job creation, manufacturing job retention and private investment commitments.

Film Production Incentives: Massachusetts provides filmmakers with a highly competitive package of tax incentives: a 25% production credit, a 25% payroll credit and a sales tax exemption. Any project that spends more than $50,000 in Massachusetts qualifies for the payroll credit. Spending more than 50% of total budget or filming at least 50% of the principal photography days in Massachusetts makes the project eligible for the production credit and a sales tax exemption.

Program requirements are straightforward. There are no annual or project caps. No residency requirements. No extended schedule of credit payouts. The payroll credit includes above- and below the line; the production credit includes out-of-state production expenses. Credits can be cashed out with the Commonwealth of Massachusetts at 90% of face value after satisfying tax liabilities, or can be transferred at market rate. Credits can be used for up to five tax years. The incentive program is managed by the Massachusetts Department of Revenue.

New Markets Tax Credit (NMTC) Program: The NMTC Program was created to stimulate investment in designated low-income communities. MassDevelopment assesses potential NMTC projects for both nonprofit and for-profit businesses, including:

    • Community and health centers
    • Retail and office space
    • Performing arts centers
    • Mixed-use developments
    • Light industrial use centers
    • New construction
    • Rehabilitation of historic and non-historic structures
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