Running a business is increasingly
complex. On any given day, a business owner worries about employees, customers, supply, demand and the all-important bottom line, among a million
other things. So, a little bit of help goes a
long way — in all facets of business.
One bit of help that many companies are
not aware of is the myriad government
economic development programs that are
available. These programs can help businesses grow, expand and be more profitable. In Ohio, there are several state
incentive programs available, all with
intentions of enhancing the state’s economy and business culture.
“In Ohio, there’s assistance available in
the form of grant dollars and favorable
term loans. In certain cases, the financing
may encompass a variety of business
investments that a commercial bank may
not finance,” says Tom Carton of the law
firm McDonald Hopkins LLC. “The state’s
interest is in business development in the
state of Ohio. When companies come to
the state, stay in the state, or expand in the
state, the state has an interest in assisting
those companies and promoting job creation, retention and attraction.”
Smart Business spoke with Carton about
incentives available to companies and how
to get them.
Why don’t companies know about the incentives available to them?
Well, for one, they’re so busy doing other
things, whether it’s expanding, adding
employees or locations, or just handling
day-to-day business, these state and local
incentives just aren’t on the radar. Plus,
many companies have limited resources —
there just isn’t the time or the manpower
available to research incentives. They
know about bank financing and other
sources of capital, but they tend to overlook incentive programs. On top of that,
states aren’t banks, so it’s not as easy to
attract companies to their programs.
How can companies find out about the incentives?
State Web sites will have a lot of the information a company needs, but there’s a lot of information to wade through, and at
times it can be cumbersome and time-consuming for a busy executive to search the
various programs, determine what they
finance, what their purposes are and how
to apply for them. Your lawyers can help
you find the best programs out there, help
you understand them and determine which
incentives fit within your business plan and
objectives. Other resources are the regional offices of the Department of Development. There are approximately a dozen
geographic regions in Ohio, and the representatives in each of those locations will
help companies understand and apply for
the programs.
Discuss some incentives and assistance programs companies can utilize.
There are mainly three types of incentives: tax credits, loans and grants. It is
important to note that each of the programs — whether tax credits, loans or
grants — may have different objectives,
prerequisites and/or eligibility requirements.
- Tax credits: Tax credits are primarily
designed to encourage both job creation
and job retention. - Loans: Loan programs have favorable interest rates and terms available. For
example, in Ohio, there’s the ‘166 loan,’
which provides financing for land and
building acquisition, expansion, renovation
and equipment purchase; the Ohio Innovation Loan Fund, which offers financial
resources for product commercialization
for technology companies; and the R&D
Investment Loan Program, which encourages companies to make investments in
research and development activities. - Grants: There are Rapid Outreach
Grants for business development, the Ohio
Investment Training Program that provides
grants for job training, and the Job Ready
Site Program, which provides grants for
infrastructure development.
What benefits can companies see from these
incentives?
All of these incentives relate to the bottom line. If your company is expanding
your business in the state, relocating to the
state, or keeping your business in the state,
incentives may be available that will help
your bottom line. On top of the monetary
value, many of these programs offer services, such as training and development,
which enhance your business as well.
How can a company stay ahead of the game?
Incentives can certainly be a moving target, as the availability and eligibility can
vary from time to time. But, it’s simply a
matter of staying in touch with your financial and legal advisers to review what programs are available and how they can fit
within your business plan. The state is
always focused on both fine-tuning the
incentives to fit today’s business environment and enhancing the processes to facilitate awareness, application and implementation. In addition, different programs
may be focused on different objectives.
TOM CARTON is a member in the Columbus office of McDonald
Hopkins LLC law firm’s Business Department and chair of its
Economic Development Practice Group. Reach him at (614) 458-0036 or [email protected].
