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INCENTIVES
Advantage Mississippi is a State program that provides incentives to companies considering relocating or expanding in Mississippi . The program offers tax breaks, credits, and abatements to qualified businesses. In addition, Advantage Mississippi offers workforce training programs, physical and technical infrastructure programs, and government support to business and industry. Many of the counties located in the Mississippi Delta Developers Association area are certified as “Growth and Prosperity” counties, which enables a locating business to not pay any state or local taxes for a period of 10 years except for the portion of local millage dedicated to schools. All of the programs of Advantage Mississippi are available in the Mississippi Delta Developers Association area. For more information, contact the Mississippi Delta Developers Association at 662-686-3365 and we will work with you to determine the programs that will best suit your location needs.
There are many local incentives offered in Northwest Mississippi as well. Local community colleges offer excellent workforce training. Tax credit and abatement programs are available as well as infrastructure improvement plans. Many of the counties in Northwest Mississippi are also located in either the Federal Empowerment Zone or the Rural Renewal Community area. These designations allow your company to receive tremendous tax credits on your federal tax bill, as well as increased depreciation on equipment. For more information, contact the contact the Mississippi Delta Developers Association at 662-686-3365 to see how your company can take advantage of the best financial package in the United States and keep more money in your pocket.
MISSISSIPPI FINANCE PROGRAMS
The Mississippi Business Finance Corporation (MBFC) administers a variety of finance programs designed to assist businesses in locating or expanding in Northwest Mississippi and the State of Mississippi.
Programs available through the Mississippi Business Finance Corporation:
• Industrial Development Revenue Bond Program
• Small Enterprise Development Program
• Rural Economic Development Assistance Program
• Loan Guaranty Program
• Minority Surety Loan Program
• Minority Business Enterprise Loan Program
Programs available through the Mississippi Department of Economic and Community Development:
• Mississippi Business Investment Act Program
• Development Infrastructure Program
• Mississippi Major Economic Impact Authority
• Economic Development Highway Program
• Mississippi Access Road Program
• Community Development Block Grant Program
• Mississippi Small Business Assistance Program
• Agribusiness Enterprise Loan Program
To learn more on how to access any of these programs contact the Mississippi Delta Developers Association at 662-686-3365
Industrial Development Revenue Bond Program
The Industrial Development Revenue Bond Program reduces the interest costs of financing projects for companies through the issuance of both taxable and tax-exempt bonds. Additionally, ad valorem and sales tax exemptions are granted in conjunction with this type of public funding.
The bonds must be secured by an irrevocable, direct-pay letter of credit or other credit enhancement acceptable to MBFC.
The proceeds of a bond issue may be used for the acquisition and construction of real property, machinery and equipment, capitalized interest, reserve funds, and a limited amount of the cost of issuance in accordance with provisions of the Internal Revenue Code.
Although there is no restriction on the amount of taxable debt that may be incurred, there is a $10 million cap on tax-exempt financing. The maximum term of a bond issue will be equal to 120% of the average life of the financed assets or thirty years, whichever is less. The effective rate of a loan to a company will be determined by using a combination of the interest rate on the bonds, the cost of issuance, and any applicable fees.
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Small Enterprise Development Program
The issuance of State General Obligation Bonds provides funds for manufacturing and processing companies to finance fixed assets, including land, buildings, new machinery, and new equipment at below market interest rates for terms of up to fifteen years.
Although a company may qualify for more than one loan under this program, the aggregate amount loaned to any company cannot exceed $4 million. Interest rates on these loans are equal to the net interest rate on the bonds issued by the State plus a serving fee.
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Rural Economic Development Assistance Program
Companies financing projects through the Small Enterprise Development or Industrial Revenue Bond Programs, which are administered by MBFC, may be eligible to participate in the Rural Economic Development Assistance Program. The program allows eligible companies to receive credits on Mississippi corporate income taxes to offset annual debt service on the bonds.
Mississippi corporate income tax credits will be granted at the end of a company's fiscal year and will be based on the Mississippi income liability at that time. The amount a company will be required to pay in Mississippi income tax will be reduced by the amount of debt service paid during the past year.
The total amount of tax credits may not exceed the annual debt service on the bond issue.
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Loan Guaranty Program
This program allows lenders to make larger loans by substantially reducing their exposure in the events of defaults. Business must be located in the state and be owned by Mississippi residents. The business owner must have equity in the project for which financing is being requested.
Proceeds may be used for all project costs associated with the establishment and/or expansion of a small business, including fixed assets, working capital, start-up costs, rental payments, interest expense during construction, and professional fees relating to the project.
Maximum loan under this program is $500,000. The state's maximum guarantee is $375,000 or 75%, whichever is less. Loans may have a maturity of up to 20 years, with rates established by the lender.
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Minority Surety Loan Program
Program enables minority contractors, not meeting the surety industry's standard underwriting criteria, to obtain bid and performance bonds on contracts with state agencies and political subdivisions in Mississippi.
Maximum bond guaranty is 75% of contract bond or $112,500, whichever is less. Contractor must be certified by MDECD, have its principal place of business in the state, meet experience and financial standards, have been in business at least one year prior to application, subcontract no more than 75% of a qualified contract and show reasonable evidence of inability to secure bonding under normal market conditions.
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Minority Business Enterprise Loan Program
This program is designed to assist eligible minority enterprises in obtaining financing for business start-ups or expansions. A minority business means a socially and economically disadvantaged small business organized for a profit, performing a commercially useful function which is owned and controlled by one or more minorities, or a minority business which is certified by MDECD. Socially and economically disadvantaged has the same meaning as described in the Small Business Act (15U.S.C.S. Section 637(a) and shall include women. Fifty percent of the owners must be residents of the state and ownership must be 60% minority.
Maximum loan amount to anyone borrower is $250,000 or 33 1/3% of the total project cost, whichever is less. Maximum terms are seven years for working capital, ten years for machinery and equipment, and fifteen years for land and buildings.
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Mississippi Business Investment Act Program
Through the issuance of State General Obligation Bonds, low interest loans are provided to counties or incorporated cities or towns to finance improvements that complement investments by private companies.
To be eligible for financing under this program, a private company must invest at least $3.00 for every $1.00 it receives in state assistance and must create and maintain new jobs as required by state statute and MDECD, The project to be financed must be necessary for the operation of the company, and it must be determined that other financing options are unavailable.
The minimum loan amount for a project is generally limited to $500,000 for a term often years or the estimated useful life of the project to be financed, whichever is greater.
Rates of interest are set by MDECD on a scale based on the number and quality of jobs created.
Loan proceeds may be used for the acquisition, expansion, or improvement of land, buildings, and infrastructure.
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Development Infrastructure Program
Through the issuance of state bonds, counties or municipalities may receive grants under the Development Infrastructure Program to finance small infrastructure projects. Counties and municipalities are encouraged to use these grants in connection with other state and federal programs.
Eligible projects must be directly related to the construction, renovation, or expansion of economic development projects. A public match of at least $2.00 for every $1.00 of Development Infrastructure assistance is required. The maximum amount that may be granted for anyone project is $250,000.
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Mississippi Major Economic Impact Authority
Unique in the nation, this program allows the state, through the issuance of general obligation bonds, to assist local communities in meeting the development requirements inherent in large capital projects, thereby generating an investment in the quality of life in such communities. Funds may be used to improve transportation, education, recreation and medical facilities within sixty-five miles of a project site. Certain other infrastructure needs are also eligible for financing.
Major Impact Authority projects can be new projects or expansions of existing facilities that have a minimum initial investment of$300 million by the private sector or the U. S. Government. Eligible projects include industrial or commercial projects, research and development, warehousing, distribution, transportation, processing, mining establishments, U. S. Government projects, and tourism facilities.
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Economic Development Highway Program
The Economic Development Highway Program assists political subdivisions with the construction or improvement of highway projects that encourage high economic benefit projects to locate in a specific area. A high economic benefit project is any new private investment of $50 million or more by a company in land, buildings, or depreciable fixed assets, or an investment of at least $20 million by a company which has statewide capital investments of at least $1 billion in the aggregate.
A private company engaged in agriculture, aquaculture, mariculture, processing, distribution, warehousing, manufacturing, research and development, or any air transportation and maintenance facility, regional shopping mall, large hotel, resort, movie industry studio, or the federal government with a project meeting the high economic benefit criteria is eligible for assistance. The highway must be necessary to ensure adequate and appropriate access to the proposed project.
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Mississippi Access Road Program
Under this program, MDECD and the Mississippi Department of Transportation assist local entities in the construction of links of highways or roads necessary to connect new and existing industrial sites to adequate road facilities.
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Community Development Block Grant Program
The State Community Development Block Grant (CDBG) Program was established to aid in the development of viable communities which provide a suitable living environment, decent housing, and economic opportunities for their residents.
The CDBG Program makes grants and loans available to incorporated municipalities and county governments that show a genuine need for specific projects and can meet the program's state and federal eligibility requirements. All Mississippi cities and counties are eligible for CDBG funding, except the entitlement cities of Jackson, Biloxi, Gulfport, Hattiesburg, Moss Point and Pascagoula.
Communities may apply for CDBG funding through the category of Economic Development. The primary criterion for economic development funding is to provide jobs for persons of low/moderate income. The Economic Development category accepts applications for communities in three subcategories.
Economic Development Public Improvements funds such activities as the provision of water, sewer, and access roads within a community.
The Economic Development Loan Program makes it possible for for-profit businesses to obtain funds for buildings, equipment, and in some cases, working capital.
The Special Economic Development Activities foster new business by providing special assistance to small businesses through the Economic
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Mississippi Small Business Assistance Program
The Mississippi Small Business Assistance Program was established for the purpose of providing funds to Qualified Entities to establish revolving loan funds to assist in financing small businesses.
Qualified Entities must be approved by MBFC and are defined as Mississippi Planning and Development Districts (PDD's), Small Business Investment Corporations, Community Development Corporations, and other similar entities.
A small business is defined as any for-profit commercial enterprise with fewer than l00 full-time employees, less than $2 million in net worth, or less than $350,000 in net annual profit, after taxes, during two of the last three years. A company meeting any of the above criteria is eligible to seek assistance under this program. No small business shall receive funding under this program in excess of $100,000 or more than 50% of the total project cost.
Maximum terms of the loans shall be fifteen years for land and buildings, ten years for equipment, five years for working capital, and three years for inventory. Interest rates cannot be less than 5% per annum or more than 4% above the Federal Reserve discount rate plus servicing fees.
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Agribusiness Enterprise Loan Program
Designed to encourage the extension of conventional financing by lending institutions, this loan provides interest-free loans to agribusinesses. An eligible agribusiness may be aquaculture, horticulture, or agriculture-related industrial, manufacturing, research and development, or processing enterprise.
Maximum loan is 20% of the total project cost or $200,000, whichever is less. Proceeds may be used to finance buildings and equipment and for costs associated with the purchase of land.
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