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
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@example.com.