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 loan and grant program. These funds are awarded for loans and grants to assist industries in locating or expanding in Tennessee. Loans are made for industrial buildings and equipment and 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-$750,000.
Through the Fast Track Infrastructure Development Program (FIDP), grant funds are allocated to assist local governments in providing public infrastructure to support new or expanding industry. The following types of public activities are eligible: water systems, wastewater systems, fiber delivery projects, transportation projects, site improvement, or other specific public infrastructure improvements required to support economic growth. Grants are typically limited up to a maximum of $750,000 with amounts determined for individual projects. The Commissioner of Economic and Community Development is required to review and approve grants requests exceeding $750,000.
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.
TNInvestco is a state-sponsored program that provides capital to high-growth, transformational businesses in Tennessee. The state has picked ten firms as award winners that are qualified TNInvestcos. The goals of TNInvestco are to develop Tennessee's entrepreneurial infrastructure, bring additional capital into the state, diversify the state's economy and create "anchors," or "clusters," of business innovation that result in the creation or spin off of new companies and the attraction of new talent to Tennessee. For more information or businesses interested in seeking funding from a TNInvestco, please visit www.tninvestco.gov.
The $29.7 million INCITE Co-Investment Fund is designed to stimulate investment into high-growth small businesses in Tennessee and promote technology commercialization from the state's research institutions. The fund enhances private sector investment and requires a minimum investment from the private sector of $300,000. It is open to a wide cross section of investors, including accredited investors with $15 million or more of assets under management; various USSBA vehicles, such as Small Business Investment Companies; accredited investors as defined by the US Securities Act of 1933; and the TNInvestcos. Tennessee received this money from the federal government as part of the $1.5 billion State Small Business Credit Initiative administered by the U.S. Department of Treasury. For more information please visit www.tntechnology.org/incite.
The Tennessee Small Business Energy Loan Program provides low-interest loans of up to $300,000 to qualified Tennessee-based businesses to help upgrade the level of energy efficiency in their buildings, plants and manufacturing processes.
Companies with fewer than 300 employees or less than $3.5 million in annual gross sales or receipts are eligible to apply for loans to install insulation, double pane windows, energy efficient heating, cooling and ventilation and energy efficient lighting. Other measures shown to save energy or decrease demand are also eligible for funding. Free energy audits are available to help interested companies identify potential sources of energy savings.
Loans can be repaid over a period of time not to exceed seven years. A 0 percent interest loan is available for businesses located in Three-Star communities. For businesses located in all other communities, the loan is available at a rate of 3 percent.
New hire training assistance:
The FastTrack Job Training Assistance Program (FJTAP) provides training assistance as a grant 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, location 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 is postemployment.
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 can be 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.