Grants and loans:
Tennessee allocates on an annual basis a significant amount of the available Small Cities Community Development Block Grant (CDBG) dollars for an industrial grant and loan program. These funds are awarded for grants and loans to assist industries in locating or expanding in Tennessee. Grants are made for public infrastructure and loans are made for industrial buildings and equipment. The loan financing is at below-market rates. The maximum loan or grant ranges from $500,000 to $750,000.
Through the Fast Track Infrastructure Development Program (FIDP), funds are allocated to assist local governments in providing infrastructure to support new or expanding industry. The following types of activities are eligible: water systems, wastewater systems, transportation projects, site improvement, or other specific infrastructure improvements required to support economic growth. Grants are limited to a maximum of $750,000 with amounts determined for individual projects.
Private activity bonds:
While the state is responsible for the allocation of private activity bond authority, private activity bonds are issued at the local level. Applications for an allocation of this bond authority are made to the Tennessee Department of Economic and Community Development by issuing authorities (local bond boards).
Revolving loan funds:
Revolving loan funds are available through nine development corporations in Tennessee. The loan fund combines funds secured from the Economic Development Administration with regional funding sources to provide new or expanding businesses with financing at below- market rates. Funding regulations vary across the state and are based on policies established by each development corporation. Generally, funding limits are based upon the number and type of jobs being created. Revolving loan funds can be used for real estate acquisition, expansion, renovation and construction, acquisition of machinery and equipment, and working capital. Funds are available to for-profit corporations, partnerships, or proprietorships.
SBA 504 loans:
The Small Business Administration 504 Loan Program provides long-term, fixed-asset financing of 40 percent of a project, not to exceed $750,000 for businesses whose net worth does not exceed $6 million and average net profits do not exceed $2 million. The loan cannot be used for working capital, debt consolidation repayment, refinancing, or venture capital.
Other financing programs:
The Tennessee Valley Authority (TVA) economic development loan fund program is designed to provide capital to finance projects that stimulate economic development and leverage capital investment in the TVA power service area.
The Economic Development Loan Fund (EDLF) provides low-interest loans to established companies relocating or expanding their operations in the Tennessee Valley. Funds may be used for building expansions, equipment, and other purposes and are offered with flexible terms and rates.
Commerce Capital, L.P., is an equity fund that leverages federal dollars for rapidly growing small businesses' operating capital needs in the Tennessee Valley.
The Meritus Venture Fund is a venture capital fund that provides equity capital and operational assistance to qualifying businesses.
The Tennessee Child-Care Facilities Corporation was created to provide new child-care spaces in the state by assisting in the start-up and expansion of child-care facilities. Designed to assist in the development of new facilities, the program has a partial emphasis on industry/business and the development of child-care assistance plans specific to their needs. The program provides direct issuance of loans or matching grants to local educational agencies and local governments, and guarantees of loans from the private sector. The corporation may guarantee up to 80 percent of bank loans up to $250,000.
The Tennessee Small Business Energy Loan program is designed to assist in the identification, installation, and incorporation of approved energy-efficiency measures for existing Tennessee businesses. Businesses of fewer than 300 employees or $3.5 million in annual gross sales or receipts can receive loans of up to $300,000. These loans are repaid at 3 percent interest over a period of time not to exceed seven years.
New hire training assistance:
The FastTrack Job Training Assistance Program (FJTAP) provides training assistance as an incentive to attract new investment and to encourage existing business and industry to make additional investments in Tennessee. The training assistance is customized to each company's individual training needs.
Levels of training assistance are determined by the amount of the company's investment, number of new hires, and the skills and knowledge that must be possessed by the prospective or newly hired employees. A customized training plan can be developed in direct coordination with company personnel. The training can be both pre-employment and postemployment, including classroom and on the job.
Reimbursement of instructional cost by company personnel and selected vendors is eligible for support. The expense of travel, for the purpose of training, is a viable option for the training of new hires and persons who will serve as company instructors.
Traditionally, manufacturing, warehousing/distribution, and service-related industries including back office, financial, and telecommunications are assisted.
Job skills program:
Tennessee JobSkills (TJS) is a work force development program giving priority to the creation and retention of existing jobs while focusing on employers in industries that promote high-skill, high-wage jobs in high-technology, demand and emerging occupations. Training grants can be awarded to employers as an incentive for investing in new technologies, with the training being focused on the performance skills of their present employees affected by the introduction of the new technology. Training assistance can also be awarded to employers who certify that a specific job or job openings exist and at the completion of the training project those participants in the project will fill such job openings. The starting wage for a new job created through the project will be equal to or greater than the prevailing starting wage for that occupation in the local labor market.
Tennessee State Contact:
Department of Economic and Community Development
Business Development Division
William Snodgrass/TN Tower, 11th Fl.
312 Eighth Avenue N.
Nashville, TN 37243-0405
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.