Illinois Direct Financial Incentives 2010
Illinois' economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include the Illinois Capital Access Program (CAP), Large Business Development Program (LBDP), Innovation Challenge Matching Grant and Technical Assistance, and the Manufacturing Energy Efficiency Program (MEEP).
Through the Participation Loan Program, the Illinois Department of Commerce and Economic Opportunity (DCEO) works with banks and other conventional lenders to provide financial assistance to small businesses that will employ Illinois workers. The state will participate in loans up to 25 percent of the total amount of a project, but not less than $10,000 or more than $750,000.
The Minority, Women and Disability Participation Loan Program is similar to the Participation Loan Program, except that participations may not exceed 50 percent of the project, subject to a maximum of $50,000.
The Illinois Capital Access Program (CAP) is designed to encourage lending institutions to make loans to small and new businesses that do not qualify under conventional lending policies. CAP is a form of loan portfolio insurance that provides coverage to the lender on loan defaults. By participating in CAP, lenders have available to them the proven financing mechanism to meet the financing needs of Illinois small businesses. Loans enrolled in this program are limited to a maximum amount of $100,000.
The Business Development Public Infrastructure Program (BDPIP) provides low-interest and grant financing to units of local government for public improvements on behalf of businesses undertaking expansion or relocation projects.
The Large Business Development Program (LBDP) provides incentive financing to encourage large out-of-state companies (500 or more employees) to locate in Illinois, and also encourages existing Illinois companies to undertake major job expansion or retention programs.
DCEO's Homeland Security Market Development Grants Program (HSMD) administers the Innovative Product Grant (IPG) program to provide up-front capital to companies or joint ventures that bring new products to market, and a companion grant program to support educational institutions and not-for-profit organizations engaged in pilot projects or development of sector focused information clearinghouses.
The Innovation Challenge Grant Program helps to support technology-driven enterprises through research and development commercialization and technical assistance efforts to help young, tech-based firms better leverage key federal grants.
Through the Innovation Challenge Matching Grant and Technical Assistance programs, companies across various technology sectors will be better able to tap into federal grants, like the Small Business Innovation and Research (SBIR) and Small Business Technology Transfer (STTR) programs, to develop technologies that can lead to commercial products.
The Community Development Assistance Program (CDAP) helps communities meet their economic development, housing, and public infrastructure needs. Grants are made to smaller local governments to benefit low- and moderate-income citizens.
The Community Services Block Grant Program (CSBG) addresses poverty issues in Illinois communities. CSBG provides low-interest loans to businesses that agree to hire low-income persons.
The Manufacturing Extension Partnership of Illinois provides manufacturers with access to information and technology expertise, enabling them to modernize their operations and become more efficient.
The Manufacturing Energy Efficiency Program (MEEP) is charged with helping Illinois manufacturers manage their energy costs by making cost-effective efficiency improvements. The program involves key decision makers in Illinois' manufacturing facilities and focuses on measures that can bring high returns with modest investments. Initially, DCEO helps firms identify best practices in energy management that can be rapidly incorporated. The program then moves to coaching services for implementation of the identified energy management, operations, or maintenance practices, with DCEO supporting 50 percent of the cost for these coaching services.
The Recycling Expansion and Modernization (REM) Program awards matching grants to Illinois organizations and businesses to accomplish recycling market expansion and waste reduction goals while demonstrating public economic benefits. Grants are provided to divert materials from the municipal solid waste stream, thereby conserving our natural resources, and improving the performance and "bottom line" of Illinois businesses and organizations (reduced operating costs, increased sales, etc.) while demonstrating public economic benefits.
The Illinois Recycling Grants Program helps communities, businesses, and not-for-profit organizations collect and process materials for recycling. Periodically, the program will issue requests for applications to fund traditional (fiber, metal, glass, and plastic) recycling efforts. The program will also periodically issue requests for applications to fund other items, with a recent focus on computer and electronics recycling.
The Illinois Renewable Fuels Research, Development, and Demonstration Program funds research, development, planning, and education projects that are designed to increase the use of renewable fuels technologies and reduce related production costs. The primary focus of the program is biofuels (ethanol and biodiesel) production and utilization. The objective of this program is to accelerate the commercialization of new renewable fuel technologies and products. This will serve to expand rural economies, develop and expand new business and investment opportunities in Illinois, reduce the outflow of energy dollars from the region, and improve the environment. With the help of this program, Illinois' biofuels industry will continue to expand and find new and better biofuels or improve those that are already being used.
Small Business Assistance and Entrepreneurship Development:
Through the Illinois Entrepreneurship Network (IEN), DCEO is providing a formalized structure for coordinated services to small businesses and entrepreneurs throughout the state. The IEN represents a comprehensive network of resources designed to strengthen the state's capacity to develop small businesses into market successes and help entrepreneurship act as a more dynamic engine of growth. IEN partners include: Entrepreneurship Centers, Small Business Development Centers, Procurement Technical Assistance Centers, International Trade Centers, and Manufacturing Extension Centers.
As part of the IEN, Entrepreneurship Centers provide up to $5,000 matching challenge grants and a number of other specialized resources for its clients. The grant awards assist entrepreneurs or small businesses with obtaining professional services for comprehensive business plan assistance, evaluation of a proposed startup or expansion or other accelerated support purposes. Award funding is determined based on the potential for successful achievement of a significant business milestone for client firms.
The IEN also works with individual companies, women's professional associations, and minority entrepreneurs to start or expand a business and provide support and counseling. The network of statewide offices provides information, referral, and procurement assistance, and serves as an information conduit to business resources throughout the state, while advocating work with individual companies and professional associations to find answers to the wide range of questions that arise from business ownership.
The Illinois Small Business Environmental Assistance Program provides free, confidential compliance for small businesses to help them understand regulatory requirements under the Clean Air Act Amendments. Located in the non-regulatory agency, the staff offers permit assistance for the Clean Air Act, operates a toll-free help line, and conducts hands-on workshops and seminars on environmental issues. The program also operates a clearinghouse of more than 300 environmental publications, including rules, fact sheets, guides, case studies, and a listing of Illinois environmental service companies.
The Revolving Line of Credit Program (RLOC) provides economic development assistance to Illinois small businesses that provide employment opportunities for Illinois citizens and need seasonal or variable working capital. Through banks, DCEO may purchase participating interests in business loans up to 25 percent of a project, subject to a minimum $10,000 and maximum $750,000 participation. (Minority, Women or Disabled participations up to 50 percent but not more than $50,000.)
The Small Business $mart Energy Program (SB$E) program provides energy efficiency technical services for small to medium-sized, for-profit businesses. The technical services can identify opportunities for energy savings through intelligent building design and efficient building components and systems. SB$E services are provided by the Smart Energy Design Center (SEDAC) with staff from the University of Illinois at Champaign-Urbana School of Architecture and the Geothermal Heat Pump Consortium. SEDAC works with building owners, business operators, architects, engineers, contractors and other industry professionals to incorporate this whole building approach.
Work force development and job training:
The Employer Training Investment Program (ETIP) supports Illinois workers' efforts to upgrade their skills in order to remain current in new technologies and business practices, enabling companies to remain competitive, expand into new markets and introduce more efficient technologies into their operations. ETIP grants may reimburse Illinois companies for up to 50 percent of the cost of training their employees. Grants may be awarded to individual businesses, intermediary organizations operating multi-company training projects, and original equipment manufacturers sponsoring multi-company training projects for employees of their Illinois supplier companies.
The Biotech Training Investment Program (bio-TIP) is a new workforce training component designed to help bioscience-related companies become more competitive by upgrading the skills of their work forces. This program is designed to serve existing bioscience businesses in the state and those who are engaging in planned permanent expansion or retention activities, to promote highly-skilled, high-wage jobs for emerging technology occupations.
The Workforce Investment Act provides job training funds to local service delivery areas for economically disadvantaged persons.
The Illinois Economic Development for a Growing Economy Program (EDGE) Program offers a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. Qualifying businesses must create new jobs and make capital investments in Illinois. The program provides tax credits to qualifying companies equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The nonrefundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years. To qualify, a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois. For a company with 100 or fewer employees, the company must agree to make a capital investment of $1 million and create at least five new full time jobs in Illinois.
The Enterprise Zone Program is designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. Enterprise Zones offer a number of state and local tax incentives to businesses that make investments to create or retain jobs in any of the 96 certified zones located in communities throughout the state. The Enterprise Zone Financing Program is a derivative of the Participation Loan Program and is designed to encourage economic development and neighborhood revitalization in Illinois Enterprise Zones.
The High Impact Business Program (HIB) is designed to encourage large-scale economic development activities by providing tax incentives to companies that propose to make a substantial capital investment in operations and will create or retain above average number of jobs. Businesses may qualify for investment tax credits, a state sales tax exemption on building materials, an exemption from state sales tax on utilities, a state sales tax exemption on manufacturing equipment purchases, repair and replacement parts. The project must involve a minimum of $12 million investment causing the creation of 500 full-time jobs or an investment of $30 million causing the retention of 1500 full-time jobs. The investment must take place at a designated location in Illinois outside of an Enterprise Zone. The program has been expanded to include qualified new electric generating facility, production operations at a new coal mine or, a new or upgraded transmission facility that supports the creation of 150 Illinois coal-mining jobs, or a newly constructed gasification facility as a "Coal/Energy High Impact Business." In 2009, the program was further expanded to include wind energy facilities. The designation as a Wind Energy/High Impact Business is contingent on the business constructing a new electric generation facility or expanding an existing wind power facility.
Tax-increment financing allows a community to capture the increase in property taxes that result from a redevelopment project to pay for the costs involved in the project.
The Business Expansion, Retention and Location Assistance Program provides business development assistance to companies wishing to locate, expand, or relocate within Illinois.
The Illinois Finance Authority is a self-supporting state agency that encourages economic development in the state by providing access to capital. The assistance provided by the authority includes: tax-exempt and taxable industrial revenue bonds; employee stock ownership plans; direct loans; refinancing for outstanding bonds; rural development loans; solid-waste-disposal revenue bonds; multifamily housing revenue bonds; and financing for not-for-profit groups and local government.
The Illinois Department of Transportation has three grant programs that can help provide the necessary road and rail access to a site: the Economic Development Program, the Truck Access Route Program, and the Rail Freight Program.
The Auto Adjustment Entrepreneurial Support Initiative from the U.S. Department of Commerce's Economic Development Administration will help create jobs by expanding entrepreneurship efforts in this region. It is one of a series of grants by the U.S. Department of Commerce to help communities recover from plant closures and layoffs by automotive manufacturers and suppliers. The source of the funds is the Midwest Flood Relief Fund. The premise is that job diversity can minimize economic disruption during disasters, as well as plant closures and layoffs by automotive manufacturers and suppliers. It applies to Boone and Winnebago counties.
Illinois State Contact:
Illinois Department of Commerce & Economic Opportunity
Jack Lavin, Director
100 West Randolph Street, Suite 3-400
Chicago, IL 60601
First Stop Business Information Center of Illinois
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.