There are five financing capabilities offered through this MEDAAF program. The assistance is provided to the business community and political jurisdictions with a variety of funding alternatives. To qualify for assistance from MEDAAF, all applicants are restricted to businesses located in a priority funding area and eligible industry sectors. Eligible industry sectors include agriculture and forestry; aerospace; biotechnology; transportation, distribution, and warehousing; environmental technology; financial services; healthcare technology and services; telecommunications; manufacturing; information technology and businesses with U.S. or regional headquarters located or to be relocated in Maryland. The specific capabilities are as follows:
Significant strategic economic development opportunities: Normally regarded as a project that causes a significant economic development opportunity on a statewide or regional level. Assistance is provided in the form of a loan. The low-interest loan can be used for land acquisition, infrastructure improvements, buildings, fixed assets, leasehold improvements, and working capital.
Local economic development opportunity: The project is to be sponsored by the governing body of the jurisdiction in which the project is located and the local jurisdiction must participate in the form of either a guarantee acceptable to the department, a direct loan, or a grant in an amount equal to at least 10 percent of the state's financial assistance. Assistance can be provided in the form of a loan, a conditional loan, or a grant. The low-interest loan can be used for land acquisition, infrastructure improvements, building, fixed assets, and leasehold improvements.
Direct assistance to local jurisdictions or the Maryland Economic Development Corporation (MEDCO) may be in the form of a loan, a conditional loan, or a grant. The total amount of the assistance cannot exceed $3 million. The use of funds includes land acquisition, infrastructure improvements, acquisition of fixed assets, leasehold improvements, up to 70 percent of the cost of a feasibility study, and up to 50 percent of the cost of preparing a local economic development strategic plan.
Regional or local revolving-loan fund provides incentive grants to local jurisdictions to help capitalize local revolving-loan funds. Each jurisdiction may receive a grant of up to $250,000 annually. To qualify for a grant, the local government must provide a matching grant of funds to the local revolving fund. The approved use of funds and respective terms of the assistance are set by the local revolving-loan fund programs. Financial assistance provided by the local RLF may be in the form of a loan, loan guarantee, or an interest rate subsidy, which is commonly referred to as a linked deposit (not subject to eligible industry sector requirements).
Special purpose loans: This category targets specific funding initiatives that are deemed critical to the state's economic health and development by the state legislature. The special purpose initiatives include such activities as brownfields, seafood and aquaculture, animal waste, arts and entertainment, and daycare (not subject to eligible industry sector requirements).
Economic Development Opportunities Fund (Sunny Day):
The purpose of the fund is to promote Maryland's participation in extraordinary economic development opportunities that provide significant returns to the state through creating and retaining employment as well as the creation of significant capital investment. Financial assistance can be in the form of a loan, conditional loan, or grant. A Sunny Day project is defined as an extraordinary economic development opportunity by the following criteria:
- The recipient must maintain a strong financial condition and a minimal risk profile
- The recipient is capable of accessing alternative sources of financing through financial institutions or capital markets
- Minimum of 5:1 capital investment by the recipient for each $1.00 of Sunny Day funds
- The recipient's project is consistent with the strategic plan of the state for economic development
- The recipient creates or retains substantial employment, particularly in areas of high unemployment.
- Additionally, the local jurisdiction is required to participate by providing any one or a combination of the following: a loan, a conditional loan, a grant, an in-kind contribution, job training funds, tax credits, tax increment financing, or below market contributions.
Maryland Industrial Development Financing Authority (MIDFA):
- MIDFA stimulates private-sector financing of economic development by issuing bonds, providing credit enhancements and linked deposits that increase access to capital for small and mid-sized companies. The fund does not provide direct loans, but insures transactions resulting in reduced credit risk, and issues taxable and tax-exempt bonds. In addition to credit-risk assessment, consideration is given to the project's economic impact. The fund charges an annual one eighth of 1 percent bond-issuance fee and if insured, a one half of 1 percent annual insurance premium.
- Conventional Loan Program: Insures transactions made by conventional and asset-based financial institution for working capital, fixed assets, letters of credit, leasing, and other related activities. Insures up to 80 percent of the obligation (90 percent for exporting) to a maximum insurance of $2.5 million.
- Taxable and tax-exempt bonds: Issues and/or insures bonds with financial institutions, counties, municipalities, industrial development authorities and other public bodies for fixed assets and certain working capital. Federal law restricts the issuance of tax-exempt bonds to not-for-profits, manufacturers, and special-use ventures involved in the development of solid-waste and energy-related projects. Bond programs insure up to 100 percent of the obligation to a maximum insurance of $7.5 million.
- Linked deposits: Can provide a below-market certificate of deposit to banks as a funding source for below-market-rate loans in certain economically distressed rural areas. The certificate of deposit is the funding source but is not collateral to the loan.
Community Development Block Grant for Economic Development Program:
The Community Development Block Grant for Economic Development (CDBG-ED) Program, created and funded by the federal government, provides assistance to Maryland's nonurban counties and municipalities for a variety of economic development activities. CDBG funds promote economic activity and recovery in Maryland's smaller rural communities; the project must create employment or eliminate slum and blight conditions. The program disperses funds to a local jurisdiction in the form of a conditional grant and then it is used for public improvements or loaned to a business. Some examples include real property acquisition, building construction or renovation, public infrastructure in support of new industry, planning grants, and many other projects that create jobs and contribute to the state's economy.
Maryland Small Business Development Financing Authority (MSBDFA):
This program provides financing for small businesses that are not able to qualify for financing from private institutions or owned by socially and economically disadvantaged persons.
- Contract financing: Through its revolving loan fund, the MSBDFA makes loan guarantees and direct working capital and equipment loans up to $1,000,000 to businesses that are unable to obtain financing on reasonable terms through normal financing channels.
- Equity financing: The Equity Participation Investment Program (EPIP) provides direct loans, equity investments, and loan guarantees - up to $1,000,000 - in franchising, technology-based industries, or for the acquisition of profitable businesses.
- Guaranty Fund Program: The Long-Term Guaranty Program assists eligible firms through guarantees and interest rate subsidies for loans to be used for working capital, the acquisition of machinery or equipment, and acquisition and improvements to real property to be used by the applicant's business. Loan guarantees may not exceed the lesser of 80 percent of the loan or $1,000,000.
- Surety bonding: The Maryland Small Business Surety Bond Program assists contractors in obtaining bonding for government or public utility contracts that require bid, performance, and payment bonds. The authority can guarantee up to the lesser of 90 percent reimbursement to a surety for losses with a total exposure not to exceed $1,350,000. The program can directly issue bid, performance, and payment bonds directly of up to $5,000,000 to eligible contractors with government or public-utility-funded projects.
The Maryland Venture Fund provides several programs whose purpose is to provide emerging high-technology businesses access to early-stage capital.
Challenge Investment Program:
This incentive provides capital investments for small start-up companies to cover a portion of the initial costs associated with bringing a new product to market. An initial investment of up to $50,000 is made. Additional investments are made in increments to a maximum of $150,000 based on performance and the achievement of specific milestones
Enterprise Investment Fund Program:
Enterprise investment provides direct equity investments in emerging technology usually at the first round of institutional financing and works with emerging companies to move them into their next stage of development as a viable business. The amount of the investment may range from $150,000 to $500,000 per enterprise.
Maryland Economic Adjustment Fund:
Maryland Economic Adjustment Fund (MEAF) assists small business entities in the state to modernize manufacturing operations, develop commercial applications for technology, or explore and enter new markets. The program is administered in accordance with the guidelines imposed by the federal government's Economic Development Act (EDA). Businesses must be in a state-designated jurisdiction. The maximum amount of the loan to any one borrower is $500,000. (The DEA provides up to $1,500,000). The uses include most business applications such as the acquisition of fixed assets, leasehold improvements, and working capital.
Other business resources:
The Maryland Industrial Partnerships (MIPS) program accelerates the commercialization of technology by jointly funding collaborative R&D projects between companies and University System of Maryland faculty. MIPS provides funding, matched by participating companies, for university-based research projects that help companies develop new products. MIPS projects help companies find solutions to technical challenges, as well as develop products, processes or training materials.
The Maryland Manufacturing Extension Partnership (MD MEP) helps manufacturers in Maryland grow profitably by creating a culture of innovation that helps companies maximize operational excellence and create opportunities for growth. Through the partnerships with NIST MEP and MEP Center partners across the U.S., the MD MEP offers a variety of training programs in Lean, Innovation Engineering, Advanced Manufacturing and Marketing. Business Growth services are designed to improve clients’ product offerings and grow their ability to market and sell products. Operational Excellence services are designed to improve the overall efficiency of client organizations at every level.
The Maryland Technology Development Corporation facilitates technology transfer from academic and federal labs into the private sector with seed funding, technical assistance and entrepreneurial support programs.
The Maryland World Class Manufacturing Consortium addresses a growing international demand by original equipment manufacturers (OEMs) for their suppliers to meet world-class manufacturing standards. Maryland's consortium takes member companies through a series of training and implementation strategies designed to help manufacturers reach world-class status in their industries.
Maryland One Stop Career Centers are located throughout Maryland serving businesses and job seekers. The centers are part of Maryland Jobs Now (MJN), a network of high-performing, results-oriented workforce organizations investing in employment and training strategies, services, and initiatives, helping job seekers and businesses succeed. Job seekers and businesses will find Maryland One Stop Career Centers leaders in using state-of-the-art technologies to match people with jobs and jobs with people.
The Maryland Workforce Exchange is a powerful online job seeker/workforce services system designed for job seekers, students, case managers, employers, training providers, workforce professionals, and others seeking benefits and services. The system provides fast access to a complete set of employment tools in one website. It allows employers to define skills and post job orders to find potential candidates; research labor market information on salaries and economic data; set up a Virtual Recruiter search agent to automatically find candidates that match the job skills of the job order and communicate with job seekers, case managers, training providers, and others within the system email and message center.
Licensing and regulatory assistance:
Maryland Made Easy is a one-stop shop to help businesses in Maryland easily access resources throughout state agencies, and gives users valuable information on licenses and permits issued by Maryland state agencies.
Maryland's Business License Information System (BLIS), is an Internet-based system that helps business owners determine which State permits and licenses are required to operate their business. The system also gives comprehensive information and contacts for all of Maryland's occupational licenses, as well as helpful links to other business-related sites throughout the State.
The Central Business Licensing (CBL) portal is an online system to provide businesses with a one-stop shop to complete and submit various applications regardless of agency or type of business. The website saves users time and money by providing most state licensing and permitting information in one location.
The FastTrack program expedites state review of qualifying development projects to allow high priority projects to receive increased Executive attention so that economic benefits are realized as quickly as possible.
Maryland State Contact:
Maryland Department of Business & Economic Development
401 E. Pratt Street
Baltimore, MD 21202
(410) 767-6300 or (888) CHOOSE MD
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.