For a list of Oregon economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
Entrepreneurial Development Loan Fund (EDLF): EDLF provides direct loans to help start-ups, micro-enterprises and small businesses expand or become established in Oregon. Participants must meet one, or both, of the following criteria:
- have revenues of less than $500,000 in the previous 12 months or
- be a business owned by a severely disabled person.
- a maximum amount of $75,000 ($100,000 total loans),
- generally a maximum term and amortization of 5 years and
- a fixed interest rate of Prime plus 2% APR, minimum.
Film & Video Incentives: Oregon offers programs to induce film and video productions. These incentives are cash-based as opposed to tax credits to simplify and speed up the process.
- Rebate on 20% of the production’s Oregon-based goods and services
- Additional cash payment of up to 16.2% of wages paid to production personnel
Oregon Business Development Fund (OBDF): A revolving loan fund that provides term fixed-rate financing for land, buildings, equipment, machinery and permanent working capital. Participants must create or retain jobs and must typically be a traded-sector business in manufacturing, processing or distribution. The program gives preference to projects located in rural and distressed areas and to small businesses with fewer than 100 employees. Loans have a maximum amount of $1 million; a maximum term and amortization of 20 years or the useful life of the project and/or collateral; a fixed interest rate of U.S. treasury Bills plus 1% APR (4% minimum APR); and a 1.5% loan origination fee.
Oregon Capital Access (CAP) Program: The CAP helps lenders (banks and credit unions) make more commercial loans to small businesses and provides capital for start-up or expansion. The program is designed for non-profit and for-profit businesses seeking funds for most business purposes. All types of loans and lines of credit are eligible. Lenders build a loan-loss reserve each time they enroll a loan. Contributions to the loan-loss reserve account are matched by the Oregon CAP. CAP loans may not be used to purchase or improve residential housing, purchase or improve real property not used for business operations or refinance an existing balance of a non-enrolled loan.
- have enrollment fees between 3% and 7% as determined by the financial institution,
- will receive a match on the enrollment fee of up to $35,000 per borrower and
- have rates and terms for repayment determined by the lender.
Oregon Express Bond Program: The Oregon Express Bond program uses much less paperwork and highly standardized documents to save borrowers time and money during the tax-exempt bond borrowing process. Business Oregon has selected a bond counsel firm with a pre-approved fee schedule. Express Bonds:
- are placed with the borrower’s bank; and
- may be feasible for financing smaller projects, particularly within the $1,000,000 to $5 million cost range.
Oregon Industrial Development Bonds: Tax-exempt bonds issued by the state of Oregon, designed to help Oregon manufacturers grow. They provide long-term financing for land, buildings and equipment. These bonds finance job creation and business growth for Oregon traded-sector, value-added manufacturers and processors by providing long-term debt financing for land, buildings and other fixed assets at a rate below prime. Affordable interest rates and tax-exempt status assist in lowering capital expenses. The bonds are available to manufacturers, processors, exempt facilities (e.g., docks or solid waste facilities) and nonprofits and generally provide the greatest benefit to the borrower for bonds of $5 million or more.
Small Business Expansion Program: Operating within the OBDF direct loan program, the Small Business Expansion Program is a new alternate financing solution fit for situations in between “almost bankable” and angel or venture capital deals, similar to mezzanine financing for working capital. This pilot program allows businesses to pay a periodic revenue payment as a percentage of net sales combined with scheduled monthly payments of principal and interest (fixed rate) to accommodate growing companies that may not qualify for traditional financing.
The percentage of sales varies per applicant. Business Oregon seeks to realize a target return on investment—from repayment of principal, interest and revenue payments—over a three to seven-year period. Additional payments may be required in event of early payoff or sale of the company. Once the pre-determined return target has been achieved, all payments stop and the company has satisfied its repayment obligations.
The company must satisfy all requirements of the OBDF program including, but not limited to, being a traded-sector business and having significant job creation impacts. Each revenue finance request will be evaluated on a case-by-case basis, but the following will be required, in general:
- Existing history of sales
- Potential for rapid growth in sales
- History of significant gross profit margins or reasonable expectations of ability to achieve significant gross profit margins
- Collateral to secure the loan or personal guarantees of major owners
- Typical financing amount of up to $250,000.
Small Manufacturing Business Expansion Program: This program provides funding assistance, in the form of cash based forgivable loans, for small manufacturing business expansion projects. The maximum available to an applicant is $50,000. The Award is based on two years (at full operation) of estimated incremental personal income taxes that the state would collect from new employees at the above pay scale. To be eligible under program, the business:
- manufactures a product or adds value to a natural resource
- is part of one of the growth industries
- has revenue from the sale of its product for at least one year
- has a least one employee (or plans to create at least one FTE as a result of the project) but has no more than 25 employees
- provides funding, from its own or other sources, for at least 50% of the cost of the project
State Energy Loan Program (SELP): Administered by the Oregon Department of Energy (ODOE), the purpose of the SELP is to promote energy conservation and renewable energy resource development. The program can loan to individuals, businesses, schools, cities, counties, special districts, state and federal agencies, public corporations, cooperatives, tribes and non-profits. Projects must be primarily in Oregon. The program offers competitive fixed interest rate loans for projects that:
- Save energy
- Produce energy from renewable resources such as water, wind, geothermal, solar, biomass, waste materials or waste heat
- Use recycled materials to create products
- Use alternative fuels
Construction-in-Process: Unfinished facility improvements may be exempt from local property taxes for up to two years while under construction, with appropriate April 1 filing each year. In an enterprise zone, most authorized businesses enjoy a somewhat broader tax abatement using a different form.
Electronic Commerce Zone: Several of Oregon’s enterprise zones have received special status to further encourage electronic commerce (or “e-commerce”) investments. “Electronic commerce” is defined as engaging predominantly in transactions via the Internet or an Internet-based computer platform. These transactions can include taking orders, closing sales, making purchases, providing customer service or undertaking other activities that serve the business’ overall purpose, even if retail in nature. Qualifying businesses may receive a credit against the business’ annual state income or corporate excise tax liability. The credit equals 25% of the investment cost made in capital assets used in e-commerce operations inside that enterprise zone. The annual maximum credit amount is $2 million per year. Unused tax credit amounts may be carried forward over the next five years.
Enterprise Zones: In exchange for investing and hiring in an enterprise zone, businesses are exempt from local property taxes on new investments for a specified amount of time, which varies among the different zone programs. Sponsored by municipal or tribal governments, an enterprise zone typically serves as a focal point for local development efforts. There are currently 68 enterprise zones in Oregon: 53 rural and 15 urban.
- Standard Program: Eligible (generally non-retail) businesses receive total exemption from the property taxes normally assessed on new plant and equipment.
- Construction-in-Process Enterprise Zone Exemption—For up to two years before qualified property is placed in service, it can be exempt from local taxes, which can cover more property than the regular exemption for commercial facilities under construction.
- Three to five consecutive years of full relief from property taxes on qualified property, after it is in service.
- Depending on the zone, local incentives also may be available.
- Special Programs: In addition, some enterprise zones offer special business tax incentives.
- Long-term Rural Enterprise Zone Facilities: The long-term program extends property tax abatement to as many as 15 years on new facility improvements and installations. Any type of business activity is eligible, but these incentives depend on local approval and varying levels of minimum investment, job creation and employee compensation at the facility, depending on location.
- Electronic Commerce Zones: Several enterprise zones have received special status to further encourage electronic commerce, or “e-commerce,” investments.
- Reservation Zone: Federally-recognized tribes in Oregon may have any of the tribe’s land designated as a “reservation enterprise zone.” The tribal government is the zone “sponsor.” A tribe also may partner with a local government on a special designation.
Food Processing Machinery and Equipment (M&E) Exemption: For five years after it is newly placed in service, qualified M&E is exempt if certified by the Oregon Department of Agriculture. Eligible M&E may be real or personal property that is used in the primary processing for human consumption of raw or fresh fruits, vegetables, nuts, legumes, grains, dairy, eggs, seafood, and with certain limitations, bakery products. In the first of the five years, the food processor also needs to file with the county assessor or Oregon Department of Revenue using an exemption claim form.
Oregon Business Expansion Program (BEP): This incentive program is available to existing companies expanding operations in Oregon or new companies coming into the state. The BEP is a cash-based incentive (forgivable loan) equivalent to the estimated increase in income tax revenue from the new hiring. Eligibility requirements:
- Company plans to hire 50 or more full-time (equivalent) employees in Oregon and already has at least 150 employees
- Annual pay for each of at least the 50 new employees will be 150% or higher than the state or county average wage, whichever is less
- Retailers are specifically excluded and the company must otherwise sell goods or services into markets involving national or international competition—’traded sector’—which can include corporate headquarters as well as manufacturing
Oregon Investment Advantage: Companies setting up operations in an eligible county can be certified at least eight times to annually deduct or subtract taxable income related to those operations, potentially eliminating any state business income tax liability for that period, which begins at least 24 months after the commencement of new operations. Requirements of the certified facility include:
- creation of at least five new full-time, year-round jobs that receive minimum level of compensation;
- facility operations are the first of their kind anywhere in Oregon for that company (which often is an existing Oregon business); and
- they do not compete with local existing businesses.
Qualified Research Activities Credits: Corporate credit for qualified research and basic research conducted each year in Oregon, as a state-level extension to the federal program.
Rural Renewable Energy Development (RRED) Zones: RRED Zones offer an incentive to encourage new investments that either:
- Harness wind, geothermal, solar, biomass or other unconventional forms of energy in Oregon to generate electricity, or
- Produce, distribute or store any of a wide variety of biofuels.
The abatement is the standard (3- to 5-year) exemption from local taxes on qualified property available in any enterprise zone, except that in a RRED Zone it is only for renewable energy activities. In addition, the total amount of property (among one or more projects) that can qualify is subject to a locally-set cap with each RRED Zone designation of $250 million or less in initial market value. The local government sponsor (county) may waive the requirement to create full-time employment with a new project, if the cost of the investment is $5 million or more.
Strategic Investment Program: The Strategic Investment Program exempts a portion of very large capital investments from property taxes for 15 years. The program is available statewide.
Work Opportunity Tax Credit (WOTC): The WOTC is a Federal tax credit designed as an incentive for businesses to hire individuals that consistently face significant barriers to employment. The main objective of this program is to enable the targeted employees to gradually move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers. Participating employers are compensated through a reduced federal income tax liability.
Business Retention Services Program: This program provides consulting services to assist Oregon companies facing difficult times. A consultant is matched with a company based on specific needs and industry requirements. The maximum benefits are $15,000 for consulting services and $30,000 for feasibility studies. In addition, to qualify for a feasibility study, the applicant must contribute 25% of the feasibility cost in cash. Businesses must be an Oregon company, be a company facing a period of hardship (such as financial or organizational distress) and be willing to fully disclose its financial status to the consultant.
Grow Oregon: The program focuses on the concept of economic gardening, and is administered by the Oregon Small Business Development Center Network (OSBDCN). The program uses teams of highly experienced business advisors who can help assess your current business and provide tools to create sustained growth. Qualified companies may receive specialized services in:
- Strategic needs assessment
- Advanced market research and analysis
- Digital media assistance
- Search engine optimization guidance
- CEO networking/mentoring
- Business planning
- Financial analysis
- Debt and equity financing assistance
- Export assistance
- Government contracting assistance
A company must meet the following criteria to qualify for the program:
- Must be an Oregon traded-sector company (defined as “industries in which member firms sell their goods or services into markets for which national or international competition exists.”)
- $1,000,000 to $50,000,000 annual gross sales
- 10-99 employees
- Demonstrated growth in gross sales, net profit or net employment in three of last five years