ME Incentives | Finance, Loans, IRB, Workforce Development

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


https://businessfacilities.com/2014/12/me-incentives-and-workforce-development-guide/
A comprehensive list of Maine financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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Maine Incentives and Workforce Development Guide

ME Incentives | Finance, Loans, IRB, Workforce Development

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

 

FINANCING

Agricultural Marketing Loan Fund (AMLF): Provides 5% interest loans for capital improvements for farms and farm related businesses. AMLF provides low cost financing to help farmers, food processors and aquaculture operations adopt new and innovative equipment and facilities in order to improve and enhance the manufacturing, marketability and production of Maine products. Funds may be used for the design, construction or improvement of commodity and storage buildings and packing and marketing facilities, or for the construction, renovation or acquisition of land, buildings, equipment, docks, wharves, piers, or vessels, located in the State of Maine and used in connection with an agricultural enterprise.

Cluster Initiative Program (CIP): Maine Technology Institute’s MTI’s Cluster Initiative Program awards up to $50,000 for feasibility planning and pilot projects up to $500,000 for collaborative initiatives that boost the strength and scale of Maine’s high-potential technology intensive clusters. CIP awards are generally made to a primary organization that represents multiple project partners, including private industry partners, industry trade groups and innovative organizations like universities or research institutions. Examples of award recipients include trade associations, regional economic development corporations or non-profit research institutions representing a collaborative.

Commercial Loan Insurance Program: Insures a portion of a loan to a business made by a participating financial institution. Insurance Types:

  • Pro-rata: covers a certain percentage of lenders loss after a default and liquidation, up to 100%.
  • Leveraged: Covers a certain percentage of lenders loss up to 25% of the loan amount at the time of default.

Community Development Block Grant Program (CDBG): Provides funding and technical support for community projects that meet economic development objectives and lead to job creation or retention for Maine residents with low to moderate incomes.

FAME Direct Loan (Formerly Economic Recovery Loan Program): This program helps new or existing businesses with flexible gap financing directly from FAME (Finance Authority of Maine). Larger loans, up to $1,000,000, may be available if substantial public benefit is demonstrated and sufficient funds are available. Most often, however, FAME Direct Loans are less than $500,000. Businesses must:

  • Be Maine-based
  • Exhibit reasonable ability to repay the loan
  • Demonstrate that other sources of capital have been exhausted

Maine Economic Development Venture Capital Revolving Investment Program: Allows the state to invest as an equal partner in eligible private venture capital funds that agree to support emerging and early-growth businesses in Maine. It leverages private capital and encourages experienced professional venture capital fund managers to invest in Maine start-up businesses. Maximum investment of $1,000,000 per fund. Available to established venture capital funds that have a strategy for the creation and retention of jobs in Maine through:

  • Investments in Maine high-growth businesses
  • A marketing and technical assistance plan
  • Appropriate monitoring of their investments
  • A technical assistance program to assist the businesses in which they invest
  • A process for complying with proposed measurement and goals

Seed Grant Program: Maine Technology Institute (MTI) Seed Grants of up to $25,000 are offered three times a year to support early-stage research and development activities for new products and services that lead to the market. Funded activities may include activities such as proof of concept work, prototype development, field trials, prototype testing, pilot studies or technology transfer activities. Funded projects must fall under one of Maine’s seven targeted technology sectors.

State Small Business Credit Initiatives (SSBCI): Helps Maine small businesses grow and thrive. Funds can be used by businesses at every stage of the business cycle, from start-up costs and acquisition, to expansion. The goal of this program is to stimulate private financing. Unlike other programs, funds are available to both businesses and commercial lenders.

Financing for the Small Business Credit Initiative is provided through these programs:

Techstart Grant: For individuals and companies across Maine who are looking to develop their new ideas and new products. Entrepreneurs with ideas of innovative technologies are encouraged to apply. TechStart Grants will be awarded up to 12 times each year, for up to $5,000 per project. Funds must not be readily available from another service provider. Grants may be used to support specific activities such as business plan development, intellectual property filings, market analysis or technology transfer activities out of research institutions. Projects must have clearly defined deliverable outcomes and endpoints for the specifically funded scope of work not to exceed six months in duration. Each grant requires a 1:1 match consisting of actual cash, salaries, staff time, or equipment directly attributable to the proposed project. Funded projects must fall under one of Maine’s seven targeted technology sectors.

 

TAX INCENTIVES

Certified Media Production Tax Credit: This credit is available to a business engaged in a media production that is certified by the Department of Economic and Community Development. The credit is equal to 5% of qualified media production expenses, as long as the business spends at least $75,000. Businesses may only use the credit in the tax year the media production is completed. Businesses eligible for the Pine Tree Development Zone income tax credit under 36 M.R.S.A. 5219-W must claim that credit in lieu of this credit. Eligible businesses may also qualify for a partial reimbursement of wages paid during a visual media production (see 36 M.R.S.A. chapter 919-A). 36 M.R.S.A. 5219-Y.

Municipal Tax Increment Financing (TIF): Tax Increment Financing is a flexible finance tool used by municipalities, towns, plantations and the Unorganized Territory to leverage new property taxes generated by a specific project or projects within a defined geographic district. Any portion of the new taxes may be used to finance public or private projects for a defined period of time up to 30 years. Currently, hundreds of Maine communities have TIF districts, from Caribou to Biddeford, Rumford to Machias.

The Program is locally-driven: the municipality, town, or city defines the district and chooses how much of the new taxes will go to what public and private projects over what period of time, with the whole package requiring local political approval. A business may approach a municipality with a proposal for investment for which a TIF district would provide financing. Or, a town might take advantage of an already-planned and financed project and create a TIF district around it, capturing a portion of new property tax revenue for specific uses.

Employment Tax Increment Financing (ETIF): A state program that helps new and established Maine businesses hire new employees by refunding from 30% to 80% of the state withholding taxes paid by the business for up to 10 years. The reimbursement rate rises with the level of local unemployment, with those in Pine Tree Development Zones receiving the highest rate. If your business plans to hire five or more new, full-time employees over a two-year period, you may be eligible for ETIF. Retail-only and not-for-profit businesses are not eligible for ETIF.

Businesses in Pine Tree Development Zones will enroll in the ETIF program as part of their PTDZ application, with a minimum of at least 1 new hire.

Maine New Markets Capital Investment Program: Funded in cooperation with the Maine Revenue Services and the Maine Department of Economic and Community Development. Administered by FAME. Attracts investment capital to low-income communities by allowing investors to receive a state tax credit on equity investments they make in Community Development Entities (CDE). This program is modeled after the federal New Markets Tax Credit Program.

Pine Tree Development Zone Program (PTDZ): Offers eligible businesses the chance to greatly reduce or virtually eliminate state taxes for up to10 years when they create new, quality jobs in certain business sectors or move existing jobs in those sectors to Maine. Depending on your business sector and location, your business may be eligible for corporate tax credits, sales and use tax exemptions for both personal and real property, withholding tax reimbursements of 80% and reduced electricity rates. (Some financial sector companies may also be eligible for certain insurance tax credits.).

A new, quality job is defined as one that:

  • Meets the income requirements for the current year. Income includes “income derived from employment” (IDE) or employee earnings, and employer payments toward employee benefits including retirement, health insurance, education, and dependent care. That total for any new, quality job must exceed the per capita personal income for that county according to the Income Table and Definitions (PDF).
  • Includes access to group health insurance with an employer contribution encouraged but not required
  • Includes access to group retirement benefits subject to ERISA with an employer contribution encouraged but not required.

Eligible sectors are:

  • Biotechnology
  • Aquaculture and Marine Technology
  • Composite Materials Technology
  • Environmental Technology
  • Advanced Technologies for Forestry and Agriculture
  • Manufacturing and Precision Manufacturing
  • Information Technology
  • Financial Services

Technology Tax Credits: Maine offers tax credits and sales tax exemptions for businesses engaged in certain specialized areas. In general, R&D tax credits are based on federal IRS rules and applied for as part of a company’s state corporate tax return. Sales tax exemptions are applied either at the time of purchase using an Industrial Users Blanket Sales Tax Certificate of Exemption or as a refund with the Refund Form.

Research Expense Tax Credit: The credit is based on a percentage of the federal Credit for Increasing Research Activities. The credit is limited to 5% of the excess qualified research expenses over the previous three-year average plus 7.5% of the basic research payments under IRC § 41(e)(1)(A). The credit is further limited to 100% of the first $25,000 in tax liability plus 75% of the tax liability in excess of $25,000. The credit cannot be carried back, but can be carried forward for up to 15 years.

Seed Capital Tax Credit: Designed to encourage equity investments in Maine businesses, directly and through private venture capital funds. FAME may authorize state income tax credits to investors for up to 50% of the cash equity they provide to eligible Maine businesses. Investments may be used for fixed assets, research or working capital. Investment year 2016 and beyond – total credits available: $5,000,000. Basic Terms:

  • Tax credits equal to 50% of the investment.
  • An investor may provide up to $500,000 per business.
  • Aggregate investment limit per business is $5,000,000 for which tax credit may be received.
  • Investments must be at risk for five years. Dividends, royalties, interest, stock options or warrants and other forms of return, which are not in the nature of return of principal, are allowed.
  • Credits must be taken in increments of 25% (of the credit) per year starting in the year of the investment. For investment not made through private venture capital funds, credits used cannot exceed 50% of the total tax due by the investor for that taxable year before application of the tax credit, and to the extent this limitation requires the taxpayer to take the credit over more than four years, unused credits may be carried forward no more than 15 years. For private venture capital funds, credits are refundable.

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