CA Incentives | Finance, Loans, IRB, Workforce Development

A comprehensive list of California financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.


https://businessfacilities.com/2014/07/ca-incentives-and-workforce-development-guide/
A comprehensive list of California financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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California Incentives and Workforce Development Guide

CA Incentives | Finance, Loans, IRB, Workforce Development

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

 

FINANCING

Alternative and Renewable Fuel and Vehicle Technology Program: Demonstrating California’s leadership in the national push to reduce dependency on petroleum and greenhouse gas (GHG) emissions while improving energy security, the Alternative and Renewable Fuel and Vehicle Technology Program (also known as AB 118) provides financial incentives for businesses, vehicle and technology manufacturers, workforce training partners, fleet owners, consumers and academic institutions to develop and deploy alternative and renewable fuels and advanced transportation technologies to help attain the state’s climate change policy objectives.

Distributing as much as $100 million annually through competitive grants and other means, the Energy Commission is leveraging large federal and private investments to help grow the nation’s energy security through fuel diversity, while encouraging long-term economic development and advanced transportation employment opportunities.

California Capital Access Program: The California Capital Access Program for Small Business (CalCAP SB or Program) encourages banks and other financial institutions to make loans to small businesses that have difficulty obtaining financing. If you own a small business and need a loan for start-up, expansion or working capital, you may receive more favorable loan terms from a lender if your loan is enrolled in the CalCAP Loan Loss Reserve Program. This program helps communities by providing financing to businesses that create jobs and improve the economy.

CalCAP is a loan loss reserve program which may provide up to 100% coverage on losses as a result of certain loan defaults. With CalCAP portfolio support, a lender may be more comfortable underwriting small business loans.

California Capital Access with Collateral Support (CalCAP – CS): CalCAP CS is a credit enhancement program that pledges cash to cover the collateral shortfall of loans made by participating lending institutions of $50,000 or more. The goal of the Collateral Support Program is to encourage banks and other financial institutions to make loans to small businesses in California. Loan proceeds can be used for a business’ start-up costs, working capital, franchise fees, equipment, inventory and the purchase, construction, renovation or improvements of an eligible place of business.

If you own a small business and lack collateral for a commercial loan, you may receive more favorable loan terms from a lender if your loan is enrolled in the CalCAP Collateral Support Program.

The program is funded through the State Small Business Credit Initiative (SSBCI), a federal program, and must confirm to the rules and guidance of the United States Treasury as well as the statute and regulations of CalCAP.

Energy Innovations Small Grant (EISG) Program: The EISG Program provides up to $150,000 for hardware projects and $75,000 for modeling projects to small businesses, non-profits, individuals and academic institutions to conduct research that establishes the feasibility of new, innovative energy concepts. Research projects must target one of the PIER R&D areas, address a California energy problem and provide a potential benefit to California electric and natural gas ratepayers.

Industrial Development Bonds – Industrial development bonds provide financing for the acquisition, construction, rehabilitation and equipping of manufacturing and processing facilities for private companies. These bonds are issued by the Infrastructure Bank, the State Treasurer’s Office, local Industrial Development Authorities, or by Joint Powers Authorities.

Pollution Control Tax-Exempt Bond Financing Program: Provides private activity tax-exempt bond financing to California businesses for the acquisition, construction or installation of qualified pollution control, waste disposal, waste recovery facilities and the acquisition and installation of new equipment.

The following types of projects are eligible for financing:

  • Large Business: Provides financing to California business, irrespective of company size, for the acquisition, construction or installation or qualified pollution control, waste disposal and resource recovery facilities
  • Small Business: Provides financing to California businesses that meet the size standards set forth in Title 13 of the Code of Federal Regulations or are an eligible small business, which is defined as 500 employees or less, including affiliates, for the acquisition, construction or installation of qualified pollution control, waste disposal and resource recovery facilities.
  • Final determination of eligibility is based upon opinion of Bond Counsel and Tax Counsel pursuant to Federal Tax Laws.

California Small Business Loan Guarantee Program (SBLGP): The SBLGP, through non-profit Financial Development Corporations (FDCs), issues loan guarantees and partners with eligible lenders to finance small businesses that experience capital access barriers. Funds can be used for start-up costs, new construction, inventory, working capital, export financing, franchise fees, business expansion, lines of credit or gap financing.

Eligible Applicants:

  • Small Businesses located in California with 1-750 employees.
  • Eligible Nonprofits

Guarantee Terms:

  • Loans up to $20 million
  • Max guarantee $2.5 million
  • Guaranteed up to 7 years; term can be longer
  • Loan interest rates negotiated between lender and borrower
  • Qualifications based on lender criteria

Farm Loan Program: Supports direct loans to small farms through participating Financial Development Corporations (FDCs). Loans are 90% guaranteed by the U.S. Department of Agriculture, Farm Serviced Agency (FSA).  The FSA can guarantee loans up to $1,399,000 (amount adjusted annually based on inflation).

Beginning Farmer Bonds: Used to help farmers finance construction or improvements on their property, or the purchase of agricultural land, breeder livestock or equipment. Under the program, a conduit bond issuer applies to the California Debt Limit Allocation Committee (CDLAC) for an allocation of Beginning Farmer Bonds. Once CDLAC approves allocation, the issuer brings together farmers, financial institutions, contract sellers or investors to negotiate terms of a transaction. The issuer then sells the bonds to finance the loan, sale or investment. Eligibility, permissible items and loan limits are set by the Internal Revenue Code.

 

TAX INCENTIVES

California Competes Tax Credit: An income tax credit available to businesses who want to come, stay or grow in California. Tax credit agreements are negotiated by GO-Biz and approved by a statutorily created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.

California Film & Television Tax Credit Program 2.0: The California Film Commission administers the Film & Television Tax Credit Program 2.0 which provides tax credits based on qualified expenditures for eligible productions that are produced in California. The $1.55 billion program runs for five years, with a sunset date of June 30, 2020. Each fiscal year—July 1 to June 30—the $330-million funding is categorized in: TV Projects, Relocating TV, Indie Features and Non-Indie Features.

New Employment Credit (NEC): The NEC is available for each taxable year beginning on or after January 1, 2014, and before January 1, 2021, to a qualified taxpayer that hires a qualified full-time employee on or after January 1, 2014, and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a designated census tract or economic development area [herein referred to as a designated geographic area (DGA)], and that receives a tentative credit reservation for that qualified full-time employee. In addition, an annual certification of employment is required with respect to each qualified full-time employee hired in a previous taxable year. In order to be allowed a credit, the qualified taxpayer must have a net increase in the total number of full-time employees in California.

California Research Credit: Reduces income or franchise tax. You qualify for the credit if you paid or incurred qualified research expenses while conducting qualified research in California. You receive 15% of the excess of current year research expenditures over a computed base amount. You may carry over any unused amount to future years until none remains. In addition, combined reporting group members may assign credit to an affiliated corporation that is a member of the same group.

Manufacturing and Research & Development Equipment Exemption: Beginning on July 1, 2014, manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases. To be eligible for this partial exemption, you must meet all three of these conditions:

  • Be engaged in certain types of business, also known as a “qualified person.”
  • Purchase “qualified property.”
  • Use that qualified property for the uses allowed by this law.

Economic Development Area Credits: California currently has four types of Economic Development Areas (EDAs) that have related tax incentives. These areas are:

  • Enterprise Zones (EZs)
  • Local Agency Military Base Recovery Areas (LAMBRAs)
  • Manufacturing Enhancement Areas (MEAs)
  • Targeted Tax Areas (TTAs)

Taxpayers who conduct business activities within the boundaries of one of these areas or zones may qualify for special state tax incentives.

 

WORKFORCE DEVELOPMENT

Employment Training Panel (ETP): Provides funding to employers to assist in upgrading the skills of their workers through training that leads to good paying, long-term jobs. The ETP was created in 1982 by the California State Legislature and is funded by California employers through a special payroll tax. The ETP is a funding agency, not a training agency. Businesses determine their own training needs and how to provide training. ETP staff is available to assist in applying for funds and other aspects of participation.

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