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Direct Financial Incentives

Loans from 40 percent to 175 percent of project cost or the location can be provided up to a maximum of $500,000, whichever is less. Loan interest rates can be above, below, or at market rates and are determined by the respective project. Maximum term is 15 years. The job-to-dollars loaned ratio cannot exceed one job per $25,000.

Capital Investment Corporation:
Carolina Capital Investment Corporation (CCIC), a private mirror corporation of JEDA, provides financing for growth-oriented, established businesses. This funding is provided through loan participations with other lenders who might need to limit their exposure.

CCIC loans are available for capital expenditures such as the acquisition of land or buildings, construction or renovation of buildings, and the purchase of new or used equipment. Working capital and refinancing needs are also eligible for funding.

The maximum CCIC loan amount is $200,000. At least one job should be created or retained for each $25,000 loaned. The term of the loan will depend on project needs up to a maximum of seven years. The interest is based upon prevailing market rates and the credit evaluation.

All CCIC loans must be secured by collateral, which may include real property, plants, equipment, accounts receivable, and inventory. Personal guarantees from the principals are normally required.

Eligible firms include manufacturing, industrial, and service (excluding retail) businesses.

Job development loans:
Companies located in a SCANA or SCE&G service district can qualify for loans up to $50,000 for working capital and/or fixed assets. Loans carry an interest rate of 5 percent for a maximum term of five years.

Pre-export working capital financing:
South Carolina businesses involved in international trade can obtain pre-export working capital financing through the Export Working Capital Guarantee Program (EWCG) of CCIC, which provides guarantees to commercial banks funding export transactions.

Private for-profit businesses are eligible to participate in the program. The CCIC guarantee is limited to 85 percent of the borrowed amount not to exceed $170,000. The guaranteed loan must be secured by collateral to support the credit risk, and the term of the program may extend to 180 days with interest rates negotiable.

Privately sponsored development credit corporation:
Business Development Corporation of South Carolina (BDCSC) is a private corporation providing financing to businesses unable to secure loans from conventional lending sources. The corporation's members are banks and other financial institutions that purchase stock and provide additional funds to the corporation for lending as needed.

BDCSC makes direct loans for terms up to 25 years to businesses for new and expanding operations. Loan proceeds can be used for most business purposes, including fixed-asset financing and working capital, as long as the expenditure is related to creating or maintaining jobs.

BDCSC borrows money from member institutions at 0.25 percent above the prime rate and, in turn, charges a slightly higher rate on loans to businesses. The rate may be fixed or variable.

Loans ranging from $50,000 to $1,000,000 will be considered, and BDCSC can participate in a package with other lenders by taking a portion of the loan.

Collateral is required for all loans and may include real property, plant and equipment, accounts receivable, personal guarantees, and other options.

Eligibility criteria are flexible. The applicant must show written verification of at least one turndown from a financial institution, and also that the proposed loan will aid in creating or maintaining jobs.

Tax-increment financing:
Firms can benefit by using the financing authorized for municipalities to improve areas within their boundaries. Incorporated municipalities are authorized to issue obligations for redevelopment of their blighted areas or threatened blighted areas. Obligations must mature within 30 years, and interest rates are determined by the governing body of the municipality. Eligible projects are buildings; improvements to streets, water, or sewer; parking facilities; or recreational facilities owned by the municipality.

Tax-exempt IDBs:
Tax-exempt IDBs may be issued by South Carolina cities and counties and JEDA (Jobs Economic Development Authority). They are typically issued to exempt facilities for terms ranging from 10 to 20 years; have fixed or variable interest rates with no maximum or minimum limit; and are secured by the revenue stream, general credit, and assets of the principal user of the assets financed.

For bonds sold publicly, a requirement for an irrevocable standby letter of credit from an approved financial institution is usually required for the face amount of the bonds issued to back the project.

Tax-exempt IDBs are available to enterprises engaged in the manufacturing of tangible personal property; to certified 501(c)(3) organizations; and to finance pollution-control facilities, acquisition of land, and depreciable assets.

The bonds for manufacturers are limited to $10 million including all capital expenditures three years prior to issue and three years post-issue.

Businesses eligible for this program include manufacturing concerns and certified 501(c)(3) nonprofit organizations, as long as the assets financed are to be used in the manufacturing process or nonprofit operation.

Taxable IDBs:
Taxable IDBs may be issued through commercial lenders or JEDA. The proceeds of taxable IDBs may be used for the acquisition, construction, or renovation of buildings and land; the purchase of new or used equipment (provided it is in conjunction with the acquisition of land and building); and working capital purposes and the refinancing of existing asset-based debt.

Firms eligible for these issues include but are not limited to manufacturing, warehouse and distribution, research and development, and real estate development.

Supplemental economic development fund:
South Carolina has highway funds specifically designated for economic development. Annually, $18 million is set aside to be given to counties to be used exclusively for the improvement of highways essential to economic development projects. This fund can be used for the construction of new or improved roads that will benefit new or expanding businesses.