Small Business Assistance Programs

Attachment 1: Small Business Financial Assistance Programs by Agency

*Program*	*Assistance Limits*	*Eligibility and Assistance Terms and Conditions*	*Eligible Uses*
Community Economic Development Fund (CEDF)*
Startup and Existing Women and Minority Loan Guarantee Program*	30% loan guarantee	Maximum $50,000 loans	· Working capital · Machinery and equipment · Inventory
Term Loans *	$1,000 to $250,000	· Fixed interest rates · Maximum 6-year term for $1,000 to $50,000 Maximum 10-year term for $5,000 to $250,000 loans	· Working capital · Current debt · Machinery and equipment · Leasehold improvements · Other agreed-upon business needs
Commercial and Real Estate Loans*	Maximum $500,000 (can be combined with other CEDF business loans, up to $750,000 maximum)	· Fixed rate, maximum 25 years	Owner-occupied property used for: · Commerce and industry · Offices · Retail · Mixed uses
Business Lines of Credit	$5,000 to $250,000	· Short-term with one year renewable · Variable rates	· Working capital · Seasonal borrowing · Inventory purchases · Gap coverage due to slow payers · Payroll · Paying time sensitive bills
*Community Investment Corporation (CIC)*
CIC-administered federal Small Business Administration (SBA) 504 Loans	504 loan covers up to 40% of total project cost, up to $5 million ($5.5 million for small manufacturers or energy conservation)	Borrowers must: · have tangible net worth less than $15 million · have average net income less than $5 million · contribute 10% of cost and private lender 50%	· Land and building acquisition · Property improvements · Facility construction, renovation, or conversion · Machinery and equipment
CIC-administered SBA Microloans	Maximum $50,000 ($25,000 for childcare businesses)	· Borrower must contribute 20% to total cost · Good credit history	· Equipment · Working capital · Insurance premiums · Marketing · Inventory

Attachment 1 (Cont.)
*Program*	*Assistance Limits*	*Eligibility and Assistance Terms and Conditions*	*Eligible Uses*
*Community Investment Corporation, cont.*
MicroNow “Fast Cash Option Loans”	Maximum $15,000	· Business operating for at least one year · Borrower has good credit history	Most purposes, including: · Inventory · Training · Marketing · Computers and software · Office furniture
Federal Economic Development Administration Loans (accessed through CIC)	Up to 90% of project costs	· Location in federally targeted area · Market based interest rate and term · Job creation	· Real estate · Facility renovation and expansion · Machinery and equipment · Working capital
*Connecticut Innovations, Inc. (CII)*
Capital Access for Business (CAB, formerly Urbank)	30% to 50% first-loss loan guarantee for up to $500,000	· 15-year loan maturity · Interest rate and other terms set by lender · Capable of repaying debt · 1.5%-2.5% borrower fees	· Working capital · Machinery and equipment · Purchase, construct, expand, or upgrade facilities
Line of Credit	$250,000-$1 million	· Business in existence for at least three years · Owner’s personal guarantee · Demonstrate ability to create or retain jobs · Capable of repaying debt	· Revenue producing equipment · Information technology upgrades · Building expansions
Working Capital Loans	Up to $ 5 million	· Business in existence for at least three years · Demonstrate ability to create or retain jobs · Owner’s personal guarantee · Maturity tailored to transaction	· Working capital · Machinery and equipment · Purchase, construct, expand, or upgrade facilities · Mortgages on owner-occupied real property
Direct Loans	Up to $5 million	· Business in existence for at least three years · Owner’s personal guarantee · Demonstrate ability to create or retain jobs · Capable of repaying debt · Up to 25 years repayment	· Working capital · Machinery and equipment · Purchase, construct, expand, or upgrade facility · Mortgages for owner-occupied real property · Brownfield cleanup and redevelopment

Attachment 1 (Cont.)
*Program*	*Assistance Limits*	*Eligibility and Assistance Terms and Conditions*	*Eligible Uses*
*Connecticut Innovations, Inc. (CI)*
Participation Loans	Up to $5 million “junior participation” loan matching conventional bank loan plus 50% CI share in project cost	· Business in existence for at least three years · Owner’s personal guarantee · Demonstrate ability to create or retain jobs · Capable of repaying debt · Bank determines interest rate, terms, and maturity; proportionately shares fees and interest with CI; and services the loan	· Working capital · Machinery and equipment · Purchasing, constructing, expanding, or upgrading facility · Mortgages on owner-occupied real property · Brownfields cleanup and redevelopment
Venture/Mezzanine Debt Funding	$300,000 to $2 million mezzanine capital (financing structured as subordinated debt or preferred equity)	Businesses with products that have been available in the market for at least one year	Business expansion
Eli Whitney Equity Fund	Up to $1.5 million per round and up to $7 million per company	Innovative product or service in bioscience, information technology, clean technology, photonics, and advanced materials	Expenses incurred to: · create new technology business or · develop new ideas or concepts for commercially viable products and services
Pre-Seed Fund	Maximum $150,000	· 50% match from private sources · Operating for less than seven years · Under $2 million in nonrecurring revenue from non-grant sources
Seed Fund	Maximum $1 million structured as debt, equity, convertible debt, or debt with warrants	Investments based on various criteria, including: · Proprietary technology · Sustainable competitive advantage · Proof of concept
Connecticut Bioscience Innovation Fund	Up to $500,000 in project funding for newly formed businesses (three to seven years) in secured loans and/or equity	· Terms depend on the type of assistance received · Projects must demonstrate a quantifiable commercial return on investment	Project expenses
Regenerative Medicine Research Fund (formerly Stem Cell Research Fund)	Up to $1.5 million in research grants	Grants, loans, loan guarantees, equity investments, or other forms of financing Terms and conditions determined by advisory board based on purpose of the assistance	· Direct and indirect project costs · Facilities
Attachment 1 (Cont.)
*Program*	*Assistance Limits*	*Eligibility and Assistance Terms and Conditions*	*Eligible Uses*
*Department of Economic and Community Development*
Small Business Express Program, Revolving Loan Fund (100 or fewer employees)	$10,000–$100,000	· Business has been registered to conduct business in Connecticut for at least a year · Up to 4% interest · Maximum 10-year term · DECD determines other loan terms, conditions, and collateral requirements to prioritize job growth and retention · No delinquent state or local taxes	· Purchasing machinery and equipment · Construction or leasehold improvements · Relocation costs · Working capital · Other commissioner-approved expenses
Small Business Express Program, Job Creation Incentive Loans (100 or fewer employees)	$10,000–$300,000 potentially forgivable loans	· Business has been registered to conduct business in Connecticut for at least a year · Up to 4% interest · Up to 10-year term · Loan forgiveness based on attainment of job goals · DECD determines other loan terms, conditions, and collateral requirements to prioritize job growth and retention · No delinquent state or local taxes	· Training · Marketing · Working capital · Other commissioner-approved expenses that support job creation
Small Business Express Program, Matching Grants (100 or fewer employees)	$10,000–$100,000 grants	· Business has been registered to conduct business in Connecticut for at least a year · No delinquent state or local taxes · Business must match state grants	· Training · Working capital · Acquiring machinery and equipment · Construction or leasehold improvements · Relocation within state · Other commissioner-approved expenses
Small Business Express Loans for Small Minority Businesses (PA 16-128)	$10,000 to $100,000 loans	· Minority (including women) ownership · Same terms and conditions as revolving and job incentive forgivable loans	Same as above

Attachment 1 (Cont.)
*Program*	*Assistance Limits*	*Eligibility and Assistance Terms and Conditions*	*Eligible Uses*
*Department of Economic and Community Development*
Manufacturing Assistance Act (MAA)	Fixed percent of costs depending on project’s location or purpose Range: Up to 90% in 17 targeted investment communities to up to 50% of costs in other communities	· Commissioner sets terms and conditions · State Bond Commission sets interest rate	· Feasibility studies, engineering, appraisals, and other planning activities · Property, machinery, and equipment purchases · Facility construction and site improvements · Relocation costs · Working capital · Job training, day care, energy conservation, pollution control, and other specified business support services
Connecticut Manufacturing Innovation Fund	Grants, loans, credit extensions, vouchers, and other types of assistance to businesses specializing in technologically advanced products and services, entities leveraging federal grants, and certified education or training programs Assistance limits determined by the Manufacturing Innovation Advisory Board	Terms set by the Manufacturing Innovation Advisory Board	· Facilities costs · Furniture, fixtures, or equipment · Tooling development and manufacture · Materials and supplies · Proof of concept · Research and development · Compensation and apprenticeships · Other costs board deems eligible

Attachment 1 (Cont.)

Program

Assistance Limits

Eligibility and Assistance Terms

Eligible Uses

Department of Labor

Small Business Subsidized Training and Employment Program (STEP UP)	Up to $20 per hour subsidy for new employee’s training and compensation Subsidy amount phases out over employee’s first six months of employment	Business must hire new employee who: · was unemployed immediately before being hired and · has a family income of less than 250% of federal poverty level	Subsidize employment and training costs
Small Manufacturer Training Grant Program (STEP UP)	Monthly grants subsidizing new employee training and compensation Initial grants up to $2,500; grant amount phases out over six months	Business must hire a new employee	Training and compensation
Unemployed Armed Forces Member STEP UP Program	Up to $20 per hour (maximum $12,500) subsidy for veteran’s employee training and compensation Subsidy amount phases out over six months of employment	Business must hire a new employee who: · served in the Armed Forces or reserves and was honorably discharged and · was unemployed immediately before being hired	Subsidize employment and training costs
Apprentice STEP UP	Up to $10 per hour subsidy for apprentice’s training and compensation Subsidy amount phases out over six months of employment	Business must hire a new employee who is a student at a high school, preparatory school, or higher education institution	Subsidize employment and training costs

Attachment 1 (Cont.)
*Program*	*Assistance Limits*	*Eligibility and Assistance Terms*	*Eligible Uses*
*Federal Small Business Administration (SBA)*
*7(a) Loan Guarantees	Maximum $5 million loans 85% guarantee for loans up to $150,000 and 75% for loans above that amount	Loan term varies depending on purpose	· Short- and long-term working capital · Land acquisition · Building construction or renovation · Business expansion · Debt financing

* CEDF financial assistance is limited to businesses that are not bankable and meet one of the following criteria:

· business is located in one of 53 targeted municipalities or

· the owner’s income is $87,701 or less

Attachment 2: State Business Tax Incentives

*Name and Agency*	*Applicable Business Taxes*	*Eligibility*	*Incentive Amount*
Rehabilitation of Historic Business Property for Mixed Residential and Commercial Use Department of Economic and Community Development (DECD)	· Insurance Premium · Corporation · Air Carrier · Railroad Company · Community Antenna · Utility Companies	Certified historic commercial, industrial, mixed residential and nonresidential, cultural, and former municipal, state, and federal property on the national or state Register of Historic Places or located in an historic district on the national or state register	· Total credits capped at $31.7 million per year beginning FY 16 · 25% of qualified rehabilitation expenditures; 30% if project includes units affordable to low- and moderate-income people · No project can receive more than $4.5 million · Unused credits may be carried forward for up to five years
Manufacturing and Specified Service Facilities in Enterprise Zones, Enterprise Zone Municipalities, or Designated Airport Development Zones (DECD and Connecticut Airport Authority) (CGS § 12-217e)	Corporation	Based on developing facilities and creating jobs Facility must be: · newly acquired, constructed, or improved · located in the enterprise zone or in another part of the town with the zone · used for manufacturing or specified financial services Business must have created jobs to do work in the facility	· 10-year credit against tax allocable to facility: o 25% credit or o 50% if at least 150 or 30% of new jobs are held by zone or city residents who qualify for federal job training assistance · Credits automatic in zones; available to manufacturers outside the zone at state’s discretion · Specified service firms outside the zones qualify for credits under the program below
Service Facilities in Enterprise Zone Municipalities (DECD) (CGS § 12-217e)	Corporation	Based on developing facilities and creating jobs	10-year credit based on number of jobs created: · 15%, 300-599 jobs · 20%, 600-899 jobs · 25%, 900-1,199 jobs · 30%, 1,200-1,499 jobs · 40%, 1,500-1,999 jobs · 50%, 2000 or more jobs

Attachment 2 (Cont.)
*Name and Agency*	*Applicable Business Taxes*	*Eligibility*	*Incentive Amount*
Apprenticeship Training , Department of Labor (DOL) (CGS § 12-217g)	Corporation (S Corps and other business entities that are not subject to this tax may earn the manufacturing trade apprenticeship credit and sell, assign, or transfer it to another taxpayer)	Hiring manufacturing, plastics, or construction apprentices participating in state-approved apprenticeship training programs Businesses hiring plastics trade apprentices qualify if the number hired exceeds the average number of plastic apprentices hired during the prior five years	· Maximum $7,500 or 50% of wages paid, whichever is less, for manufacturing and plastics trade apprentices · Maximum $4,000 or 50% of wages, whichever is less, for construction trade
Incremental Research and Development Expenditures, Department of Revenue Services (DRS) (CGS § 12-217j)	Corporation	Businesses that increase their R&D expenditures over the prior year	20% of the amount spent on R&D over the prior year’s spending
Research and Development Expenditures (DECD) (CGS § 12-217n)	Corporation	Any business incurring R&D expenditures	· Credit amount determined according to statutory two-step formula · Credits range from 1% for expenditures under $50 million to 6% for expenditures over $200 million · Only one-third of credit can be taken per year · Unused credits may be carried forward until fully taken
Research and Development Expenditures for Qualified Small Businesses (DECD) (CGS § 12-217n)	Corporation	Businesses with gross incomes under $100 million	· 6% of total R&D expenditure · Only one-third of credit can be taken per year · Unused credits may be carried forward until fully taken
Research and Development Expenditures for Enterprise Zone Businesses (DECD) (CGS § 12-217n)	Corporation	Any business headquartered in an enterprise zone employing over 2,500 people and with annual revenues over $3 billion	The greater of 3.5% of total R&D expenditure or the amount derived from the statutory two-step formula used by big businesses outside the zone
Machinery and Equipment (DRS) (CGS § 12-217o)	Corporation	Business must have increased the amount it spent for machinery and equipment used in Connecticut over the prior year’s amount	Credit depends on the number of employees: · 10% for businesses with 250 or fewer employees · 5% for businesses with between 251 and 800 employees

Attachment 2 (Cont.)
*Name and Agency*	*Applicable Business Taxes*	*Eligibility*	*Incentive Amount*
Purchase of Electronic Data Processing (DRS) (CGS § 12-217t)	· Unrelated Business Income of Nonprofit Corporations · Air Carrier · Railroad Company · Community Antenna · Utility Companies · Insurance Premium · Corporation	Businesses paying property taxes on computers, printers, peripheral computer equipment, bundled software, and similar equipment	Credit is 100% of property tax paid on electronic data processing equipment
Fixed Capital Investments (DRS) (CGS § 12-217w)	Corporation	Property must: · Have a minimum five-year class life · Not be sold or transferred · Be held or used in Connecticut	5% of fixed capital costs incurred during income year
Human Capital Investments (DRS) (CGS § 12-217x)	Corporation	Eligible activities include: · job training · work education · child care subsidies · day care facilities · donations to colleges and universities for technology	· 5% of expenditure · Unused credits may be carried forward for up to five years
Urban and Industrial Sites Reinvestment (DECD) (CGS § 32-9t)	· Insurance Premium · Corporation · Air Carriers · Railroad Company · Community Antenna · Utility Companies · Other specified business taxes	Business investing in projects developing or redeveloping property, including brownfields, that meet statutory criteria, including generating new tax revenue and other economic benefits Business may invest the funds directly in a project or through a fund manager	Total credits available for all projects capped at $950 million 100% credit, up to $100 million, spread out over 10 years: 0% in first three years after the investment was made, 10% per year in the next four years, and 20% per year in the remaining three years Unused credits may be carried forward for up to five years or assigned to another taxpayer

Attachment 2 (Cont.)
*Name and Agency*	*Applicable Business Taxes*	*Eligibility*	*Incentive Amount*
Corporations Created in Enterprise Zones (DECD) (CGS § 12-217v)	Corporation	Corporation must be created in a zone and meet one of these job goals: · has at least 375 employees, at least 40% of whom reside in the zone or its city and qualify for federal job training assistance or · has less than 375 employees, at least 150 of whom reside in the zone or its city or qualify for federal job training benefits	10-year credit: · 100% for the first three years · 50% for the next seven years
Manufacturing Reinvestment Account (DECD) (CGS § 32-9zz)	100% of the funds withdrawn from the account and used for eligible purposes are exempted from · Corporation · Personal Income	Up to 50 small manufacturers (150 or fewer employees)	· Up to five-year tax deferral on up to $100,000 deposited in interest-bearing bank account · Funds withdrawn within five years are exempted from taxes if used for worker training, capital expenses, and other eligible uses
Invest CT Funds (formerly, Insurance Reinvestment Program) ((CGS § 38a-88a, 1994)	Insurance Premium	· Insurance companies investing cash in state-certified “insurance reinvestment funds” · Funds must invest the cash only in eligible Connecticut-based businesses and meet other investment requirements	· 100% of cash investment claimed over 10 years, beginning in the fourth year after investment was made: o 10% per year in years four through seven o 20% per year in years eight through 10 o Five-year carry forward; no carryback · Total credits capped at $350 million, annual cap, $40 million
Angel Investment (CGS § 12-704d, 2010; no new credits may be allocated after June 30, 2019)	Personal Income	· Minimum $25,000 investments in start-up technology-based businesses operating in Connecticut	· Credit equals 25% of cash investment up to $250,000 · Five-year carryforward; no carryback · Total annual credits capped at $3 million · Investors may sell, assign, or transfer credit to other taxpayers

Attachment 3: Federal Tax Incentives

*Program and Agency*	*Applicable Business Taxes*	*Eligibility*	*Incentive Amount*
Section 179 Tax Deduction for qualifying purchases of property, Internal Revenue Service (IRS)	· Corporation · Personal Income	Wide range of depreciable tangible personal property, including: · machinery and equipment · office equipment · gasoline storage tanks and pumps	Deduction equal to the cost of qualifying property, subject to dollar and business income limits determined by the type of property
Section 199 Domestic Production Activities Tax Deduction (DPAD); (IRS)	· Corporation · Personal Income	Eligible activities include: · U.S.-based manufacturing · selling, leasing, or licensing U.S. made goods · selling, leasing, or licensing films produced in U.S. · construction services related to a U.S. construction project	Generally, 9% of the smaller of: · qualified production activities income or · adjusted gross income for an individual, estate, or trust figured without the DPAD
Empowerment Zones (IRS)	Corporation	Businesses hiring zone residents or acquiring property eligible for Section 179 deduction	· Wage credits of up to $3,000 for qualifying employees · Increased Section 179 deductions · Increased Work Opportunity Tax credit
New Market Tax Credit (IRS)	Corporation	Corporations and individuals investing in eligible “Community Development Entities”	Credit equals 39% of original investment amount and is claimed over a 7-year period
Work Opportunity Tax Credits (IRS)	Corporation	Hiring and retaining veterans and people from other qualified groups	Tax credit amount varies from 25%-40% of an individual’s first year wages, depending on which “target group” the new employee belongs to

Attachment 4: Connecticut Economic Development Corporations

*Name*	*IRS Code* *Designation*	*Purpose*	*Geographic Area Served*
*Name*	*IRS Code* *Designation*	*Purpose*	*Regional*	*Municipal Only*	*Neighborhood Only*
Bradley Development League Inc.	501(c)(4)	Market airport and region for economic growth	East Granby, Suffield, Windsor, and Windsor Locks
Broad-Park Development Corporation	501(c)(3)	Upgrade physical housing and economic development in specific Hartford neighborhoods	57 Hartford-area municipalities		Frog Hollow and South Green
Community Investment Corporation	501(c)(4)	Promote economic growth and community development statewide	All regions
Greater Hartford Business Development Center, Inc.	501(c)(3)	Stimulate economic development in the Hartford metropolitan area by collaborating with public and private organizations to help start, finance, retain, and recruit small businesses within region	Hartford region
Housatonic Industrial Development Corporation	Nonstock Corporation	Help Connecticut businesses grow, create, or retain jobs and achieve economic development goals	Statewide
Orange Economic Development Corporation	501(c)(3)	Encourage economic growth in Orange’s retail, commercial, industrial zones		Orange
Mansfield Downtown Partnership, Inc.	501(c)(3)	Direct the rehabilitation and enhancement of specific areas			Storrs Center, King Hill Road, and Four Corners Areas
MetorHartford Alliance	501(c)(6)	Provide visible leadership enabling region to fulfill opportunities related to sustainable economic growth
Naugatuck Economic Development Corporation	501(c)(3)	Promote and facilitate professional, systematic approach to economic development in Naugatuck		Naugatuck
New London Main Street	501(c)(3)	Preserve, develop, and enhance economic, social, and cultural quality of life in downtown New London			Downtown New London

Attachment 4 (Cont.)

*Name*	*IRS Code* *Designation*	*Purpose*	*Geographic Area Served*
*Name*	*IRS Code* *Designation*	*Purpose*	*Regional*	*Municipal Only*	*Neighborhood Only*
Northeast Connecticut Economic Alliance	501(c)(3)	Promote, stimulate, and expand Northeast CT economic base by providing resources, consulting, and business networking	Ashford, Brooklyn, Canterbury, Chaplin, Columbia, Coventry, Eastford, Hampton, Killingly, Lebanon, Mansfield, Plainfield, Pomfret, Scotland, Sterling, Thompson, Union, Willington, Windham, and Woodstock
Northwest Connecticut Economic Development Corporation	501(c)(4)	Public and private collaboration for creating jobs, strengthening tax base and improving the economic well being in region	Barkhamsted, Canaan, Colebrook, Cornwall, Goshen, Hartland, Harwinton, Kent, Litchfield, Morris, North Canaan, New Hartford, Norfolk, Roxbury, Salisbury, Sharon, Thomaston, Torrington, Warren, Washington, and Winsted/Winchester
Stamford Partnership, Inc.	501(c)(3)	Plan, promote, and implement orderly economic development		Stamford
South Central Connecticut Regional Economic Development Corporation	501(c)(4)	Promote regional economic development	Bethany, Branford, East Haven, Guilford, Hamden, Madison, Meriden, Milford, New Haven, North Branford, North Haven, Orange, Wallingford, West Haven, and Woodbridge
Southeastern Connecticut Enterprise Region Corporation	501(c)(3)	Stimulate and support economic development and diversification of southeast region by fostering climate favorable for development, supporting business retention and expansion, recruiting new businesses, coordinating municipal economic development efforts, and defining and updating region’s goals	Bozrah, Colchester, East Lyme, Franklin, Griswold, Groton, Groton City, Ledyard, Lisbon, Lyme, Montville, New London, North Stonington, Norwich, Preston, Salem, Sprague, Stonington, Stonington Borough, Waterford
Southside Institutions Neighborhood Alliance, Inc.	501(c)(3)	Work cooperatively with community to develop leadership and improve economic, physical, and social characteristics in specific Hartford neighborhoods			Frog Hollow, Barry Square, and South Green

Small Business Assistance Programs

By: John Rappa, Chief Analyst
March 13, 2017	\|	2017-R-0079