The Hunt for Incentives Incentives for small businesses are easy to find, if you know where to look.
By Maria Meyers
Treasure hunting is in, and it's everywhere-in movies, in books, on television and in small business.
Small business?
Yes, small business owners may not be cracking a Da Vinci Code cryptex over morning coffee, but many are treasure hunters, searching for often hidden incentives that will bridge the financial gap between business plan and business reality.
Finding a treasure chest with free money would be nice. Finding incentives in the form of low-interest loans, tax credits or matching grants is more likely. Even though incentive opportunities are out there, they have to be found through research. The key is knowing where to find help.
Start in Your Own Backyard Incentives are grounded in a trade of services-including job creation, training and community rehabilitation-that prove the business owner will make a demonstrable commitment to the community's economic development. That makes local economic development centers (EDCs) the best place to start for help.
Because their expertise lies in their knowledge of the communities they serve, EDCs can act as a liaison between your business and the city, pointing you toward financial and training incentives that meet specific business needs. The Economic Development Corporation of Kansas City, for example, works closely with the Missouri Department of Economic Development to generate proposals for tax incentive programs. One such program, Tax Increment Financing (TIF), allows businesses to apply future taxes toward development costs in blighted or economically underused areas.
EDCs also can unlock other sources of funding, including low-interest loans or grant programs. The Gladstone Community Development Corporation in Missouri, for example, offers loans for façade improvement to qualified businesses at below market interest rates. Similarly, the Mission Business Development Committee in Kansas has a 2-1 matching grant program to encourage commercial revitalization in its business district.
Widen the Field Taking the search to the state level opens up more incentive opportunities. In Missouri and Kansas, the numerous tax credits and training incentives work differently and carry varying expiration dates.
Missouri's Department of Economic Development administers most state tax credits. The Enhanced Enterprise Zone, for example, provides tax credits that are refundable, saleable or transferable. To qualify, businesses must meet geographical requirements, create at least two new jobs and generate at least $100,000 in new investment.
The Missouri Quality Jobs Program encourages the creation of new jobs by allowing businesses to keep a substantial portion of their employees' state withholding. Requirements vary by location and type of businesses.
Among its other incentive programs, the Missouri Department of Economic Development offers financial assistance to train employees through its Customized Training and New Jobs Training programs. The agency also awards tax credits for private contributions to designated social or community programs.
In Kansas, most financial incentives are administered by the Department of Commerce and Housing, and are outlined in two publications, both available online: Kansas Data Book and Steps to Success: A Resource Guide to Starting a Business in Kansas.
Like Missouri, Enterprise Zone Program in Kansas offers tax credits for new jobs and capital investment. Eligibility depends on the type of business and the number of new jobs. The entire state of Kansas is designated as an Enterprise Zone. For example, a manufacturer in Kansas City, Kan., that creates at least two jobs can receive a tax credit of $1,500 for each new job. Those businesses that don't qualify for the Enterprise Zone incentive can receive tax credits under the Job Expansion and Investment Tax Credits Act, if they create at least two new jobs.
In addition to tax credits for jobs and training, Kansas offers an Employer Health Insurance Contribution Credit. This income tax credit is offered to employers who contribute to employees' health insurance or care.
Kansas also awards tax credits for contributions to the Kansas Community Entrepreneurship Fund and to approved community service organizations. Again, similar to those offered in Missouri, these incentives help spur economic development and support social policy.
The Hunt Begins Here KCSourceLink (www.kcsourcelink.com) connects you to a resource directory of more than 140 nonprofit resource partners, as well as a resource library with specific opportunities from loans, grants and small business incubators. Missouri Department of Economic Development's Division of Business and Community Services (www.missouridevelopment.org) posts its incentive programs under "Business Solutions."
Kansas Department of Commerce and Housing (www.kdoch.state.ks.us) provides PDFs of the Kansas Data Book and Steps to Success: A Guide to Starting a Business in Kansas.
Maria Meyers, network builder, leads the KCSourceLink and U.S.SourceLink team. Founding sponsors of KCSourceLink, a program of the Institute for Entrepreneurship and Innovation at University of Missouri-Kansas City, are the Ewing Marion Kauffman Foundation, the Henry W. Bloch School of Business and Public Administration at UMKC and the U.S. Small Business Administration. There is no cost for using KCSourceLink's network services. You can contact Meyers at (816) 235-6500 or .
