Financial Tools & Incentives

Businesses can take advantage of financial tools and incentives offered at the federal, state, and local level. Many banks participate in small business financing programs.

 

Federal

U.S. Small Business Association (SBA) Loan Programs

  1. General Small Business Loans 7(a): This is SBA's most common loan program and includes financial help for businesses with special requirements.
  2. Real Estate & Equipment Loans CDC/504: This program provides financing for major fixed assets, such as real estate or equipment.

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California


A general overview of the Governor’s Economic Development Initiative (GEDI) can be found here.

State Incentives

  1. California Sales & Use Tax Exemption: Learn how this applies to the purchase of new equipment and certain tenant improvements.  
  2. California Competes Tax Credit: This is an income tax credit negotiated between the Governor's Office of Business and Economic Development and California companies. Check the website in August or September 2014 for the application for the next round of credits.
  3. New Employment Tax Credit: This is a geographically based tax credit of up to $63,000 per employee for qualified new hires.
  4. Work Opportunity Tax Credit: The WOTC promotes the hiring of individuals who qualify as members of target groups, by providing a federal tax credit incentive of up to $9,600 for employers who hire them.
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State Financing Options

  1. California Collateral Support Program: This program can provide lenders up to 50% collateral support (in the form of cash) per qualified loan to encourage lenders to finance business projects in California.  
  2. California Capital Access Program (CalCAP): This program is a form of loan portfolio insurance, which may provide up to 100% coverage on certain loan defaults. 
  3. California Infrastructure and Economic Development Bank (iBank): The California iBank administers various financing and loan guarantee programs. 
    3a. Industrial Development Bond (IDB) The IDB Program provides tax-exempt financing up to $10 million for qualified manufacturing and processing companies for the construction or acquisition of facilities and equipment. IDBs allow private companies to borrow at low interest rates normally reserved for state and local governmental entities.
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