Financing Tools for North Carolina Recycling Businesses
Financing Tools for North Carolina Recycling Businesses NC Recycling Business Assistance Center Division of Environmental Assistance and Customer Service Department of Environment and Natural Resources ______________________________________________________________________________________________________________________________________________________
The Recycling Business Assistance Center (RBAC), a partnership with the Division of Environmental Assistance and Customer Service and the North Carolina Department of Commerce, offers a variety of financial tools and incentives for recycling businesses in North Carolina including tax credits, grants, loans and incentive programs. Property Tax Credits The NC Recycling Property Tax Exemption offers a tax exemption on equipment and facilities used exclusively for recycling and resource recovery. For more details and application information, please visit the Solid Waste Section of the NC Department of Environment and Natural Resources website at http://portal.ncdenr.org/web/wm/sw/taxcert. Although not designed specifically for recycling businesses, the NC Sales Tax Incentive for Manufacturing Equipment allows a one-percent privilege tax rate on equipment purchases with a maximum tax of $80.00 per article. Therefore, rather than the usual seven percent sales tax, a one percent tax on equipment is charged per article. To qualify, the business must be in North Carolina, use purchased equipment for operational use, and most importantly, fall within the definition of “manufacturer.” Please visit the NC Division of Revenue’s website at http://www.dornc.com/practitioner/index.html for more information. Grants In an effort to divert materials from the waste stream while supporting business growth, expansion and job creation in North Carolina, RBAC offers Recycling Business Development grants to eligible private sector and nonprofit organizations. Funds are typically used towards sustainable investments in equipment and buildings necessary to increase the capacity of a recycling business. Funding is made available through an annual Request for Proposal process that begins in November. Applicants may request a maximum of $40,000* and must provide at least a 50% cash match of the requested amount. Please visit the Grants section of the RBAC website at http://portal.ncdenr.org/web/deao/rbac/financing for more information. *The availability of grant funds is contingent on appropriations from the North Carolina General Assembly.
Loans A variety of loans may be available to recycling businesses. While RBAC does not lend money directly, it does provide information on a range of loan types and agencies available to recycling businesses. Name of Loan NC Recycling Loan Fund http://www.self-help.org/business/loanscredit
Golden LEAF Program http://www.self-help.org/business/loanscredit/specialty-loan-funds.html
Natural Capital Investment Fund http://www.conservationfund.org/ourconservation-strategy/majorprograms/natural-capital-investment-fund/
Mountain BizWorks http://www.mountainbizworks.org/
Neuse River Development Authority http://www.nrda.org/
Small Business Administration Loans http://www.sba.gov/category/navigationstructure/loans-grants/small-businessloans
Loan Description Supports fledgling businesses until they become bankable and qualified for full service private sector funding
Businesses Assisted Paper; scrap metal; construction and demolition debris; plastics; wood
Assistance for small businesses in rural and tobacco dependent counties
Priority given to construction, green industries, manufacturing and agriculture Recycling
$35,000-$250,000
Small businesses
Up to $50,000
Financing for recycling companies focused on the sustainable use of natural resources Provides business planning courses, technical support and training Private sector financial intermediary focused on community development investment Guarantor of loans made by private and other institutions
Small business borrowers in eastern NC’s Low Income Communities Small businesses
Loan Amount $10,000-$1million+ ($75,000 average)
Recycling Facility Tax Credits An owner that purchases or leases machinery and equipment for a major recycling facility (at least $300 million investment and at least 250 new, full-time jobs) in the state during the taxable year is allowed a tax credit. The credit is equal to 50 percent of the amount payable by the owner during the taxable year of purchase or lease of the machinery and equipment. Incentive Programs The Job Development Investment Grant (JDIG) is a performance-based, discretionary incentive program that provides cash grants directly to new and expanding businesses to help offset the cost of locating or expanding a business facility in the state. These cash grants are not tied to qualified expenses or other such requirements. The One North Carolina Fund consists of nonrecurring appropriations made available to the governor as a flexible and discretionary tool allowing North Carolina to respond quickly to enable job creation and/or retention for projects competitive with other locations. Awards are based on jobs created, economic impact of the project, the importance of the project to the state, quality of industry and environmental impact. Additional information on financial incentives offered by the NC Department of Commerce can be found at http://www.thrivenc.com/incentives/financial. Name of Incentive Job Development Investment Grant (JDIG)*
*Program specifications and allocations contingent on appropriations from the North Carolina General Assembly.
One North Carolina Fund*
*Program specifications and allocations contingent on appropriations from the North Carolina General Assembly.
Incentive Description Grant is calculated by weighing a number of factors to determine the significance of the project and include the number of net new jobs, the wages of the jobs compared to the county average wage, whether or not the capital investment anchors the company in the community, and whether the industry is one of the state’s targeted industry sectors. Grant funds are disbursed annually, for up to 12 years, to approved companies based on a percentage of withholding taxes paid by new employees, following satisfaction of performance criteria set out in grant agreements.
Awards are allocated to local units of government as part of a negotiated challenge grant. Local governments are required to match the One North Carolina award with cash, fee waivers, inkind services, donations of land, buildings or other assets or provisions of infrastructure. The amount of an award will vary by project, but a rule of thumb is that a Tier 1 community is normally offered a grant of approximately $3,000 per job, a Tier 2 community is normally offered a grant of approximately $2,000 per job, while a Tier 3 community is normally offered a grant of approximately $1,000 per job.
Target Parameters -Tier 1 communities include 125 jobs at an average wage of 105% of the county average wage and a capital investment equal to or greater than $10,000 per job. -Tier 2 communities include 150 jobs at an average wage of 110% of the county average wage and a capital investment equal to or greater than $10,000 per job. -Tier 3 communities include 200 jobs at an average wage of 115% of the average wage (or the state average wage, whichever is lower) and a capital investment equal to or greater than $10,000 per job. Durham, Mecklenburg and Wake counties are exceptions to these target parameters and projects considering those counties should include at least 250 jobs. -Tier 1 communities include 20 jobs at an average wage equal to the county average wage. -Tier 2 communities include 20 jobs at an average wage equal to the county average wage. -Tier 3 communities include 40 jobs at an average wage of 110% of the average wage (or the state average wage, whichever is lower).
For more information about financial tools and incentives for recycling businesses in North Carolina, please visit http://portal.ncdenr.org/web/deao/rbac/financing or contact Stacy J. Smith, Recycling Business Development Specialist at 919-707-8135.
The Recycling Business Assistance Center (RBAC), a partnership with the Division of Environmental Assistance and Customer Service and the North Carolina Department of Commerce, offers a variety of financial tools and incentives for recycling businesses in North Carolina including tax credits, grants, loans and incentive programs. Property Tax Credits The NC Recycling Property Tax Exemption offers a tax exemption on equipment and facilities used exclusively for recycling and resource recovery. For more details and application information, please visit the Solid Waste Section of the NC Department of Environment and Natural Resources website at http://portal.ncdenr.org/web/wm/sw/taxcert. Although not designed specifically for recycling businesses, the NC Sales Tax Incentive for Manufacturing Equipment allows a one-percent privilege tax rate on equipment purchases with a maximum tax of $80.00 per article. Therefore, rather than the usual seven percent sales tax, a one percent tax on equipment is charged per article. To qualify, the business must be in North Carolina, use purchased equipment for operational use, and most importantly, fall within the definition of “manufacturer.” Please visit the NC Division of Revenue’s website at http://www.dornc.com/practitioner/index.html for more information. Grants In an effort to divert materials from the waste stream while supporting business growth, expansion and job creation in North Carolina, RBAC offers Recycling Business Development grants to eligible private sector and nonprofit organizations. Funds are typically used towards sustainable investments in equipment and buildings necessary to increase the capacity of a recycling business. Funding is made available through an annual Request for Proposal process that begins in November. Applicants may request a maximum of $40,000* and must provide at least a 50% cash match of the requested amount. Please visit the Grants section of the RBAC website at http://portal.ncdenr.org/web/deao/rbac/financing for more information. *The availability of grant funds is contingent on appropriations from the North Carolina General Assembly.
Loans A variety of loans may be available to recycling businesses. While RBAC does not lend money directly, it does provide information on a range of loan types and agencies available to recycling businesses. Name of Loan NC Recycling Loan Fund http://www.self-help.org/business/loanscredit
Golden LEAF Program http://www.self-help.org/business/loanscredit/specialty-loan-funds.html
Natural Capital Investment Fund http://www.conservationfund.org/ourconservation-strategy/majorprograms/natural-capital-investment-fund/
Mountain BizWorks http://www.mountainbizworks.org/
Neuse River Development Authority http://www.nrda.org/
Small Business Administration Loans http://www.sba.gov/category/navigationstructure/loans-grants/small-businessloans
Loan Description Supports fledgling businesses until they become bankable and qualified for full service private sector funding
Businesses Assisted Paper; scrap metal; construction and demolition debris; plastics; wood
Assistance for small businesses in rural and tobacco dependent counties
Priority given to construction, green industries, manufacturing and agriculture Recycling
$35,000-$250,000
Small businesses
Up to $50,000
Financing for recycling companies focused on the sustainable use of natural resources Provides business planning courses, technical support and training Private sector financial intermediary focused on community development investment Guarantor of loans made by private and other institutions
Small business borrowers in eastern NC’s Low Income Communities Small businesses
Loan Amount $10,000-$1million+ ($75,000 average)
Recycling Facility Tax Credits An owner that purchases or leases machinery and equipment for a major recycling facility (at least $300 million investment and at least 250 new, full-time jobs) in the state during the taxable year is allowed a tax credit. The credit is equal to 50 percent of the amount payable by the owner during the taxable year of purchase or lease of the machinery and equipment. Incentive Programs The Job Development Investment Grant (JDIG) is a performance-based, discretionary incentive program that provides cash grants directly to new and expanding businesses to help offset the cost of locating or expanding a business facility in the state. These cash grants are not tied to qualified expenses or other such requirements. The One North Carolina Fund consists of nonrecurring appropriations made available to the governor as a flexible and discretionary tool allowing North Carolina to respond quickly to enable job creation and/or retention for projects competitive with other locations. Awards are based on jobs created, economic impact of the project, the importance of the project to the state, quality of industry and environmental impact. Additional information on financial incentives offered by the NC Department of Commerce can be found at http://www.thrivenc.com/incentives/financial. Name of Incentive Job Development Investment Grant (JDIG)*
*Program specifications and allocations contingent on appropriations from the North Carolina General Assembly.
One North Carolina Fund*
*Program specifications and allocations contingent on appropriations from the North Carolina General Assembly.
Incentive Description Grant is calculated by weighing a number of factors to determine the significance of the project and include the number of net new jobs, the wages of the jobs compared to the county average wage, whether or not the capital investment anchors the company in the community, and whether the industry is one of the state’s targeted industry sectors. Grant funds are disbursed annually, for up to 12 years, to approved companies based on a percentage of withholding taxes paid by new employees, following satisfaction of performance criteria set out in grant agreements.
Awards are allocated to local units of government as part of a negotiated challenge grant. Local governments are required to match the One North Carolina award with cash, fee waivers, inkind services, donations of land, buildings or other assets or provisions of infrastructure. The amount of an award will vary by project, but a rule of thumb is that a Tier 1 community is normally offered a grant of approximately $3,000 per job, a Tier 2 community is normally offered a grant of approximately $2,000 per job, while a Tier 3 community is normally offered a grant of approximately $1,000 per job.
Target Parameters -Tier 1 communities include 125 jobs at an average wage of 105% of the county average wage and a capital investment equal to or greater than $10,000 per job. -Tier 2 communities include 150 jobs at an average wage of 110% of the county average wage and a capital investment equal to or greater than $10,000 per job. -Tier 3 communities include 200 jobs at an average wage of 115% of the average wage (or the state average wage, whichever is lower) and a capital investment equal to or greater than $10,000 per job. Durham, Mecklenburg and Wake counties are exceptions to these target parameters and projects considering those counties should include at least 250 jobs. -Tier 1 communities include 20 jobs at an average wage equal to the county average wage. -Tier 2 communities include 20 jobs at an average wage equal to the county average wage. -Tier 3 communities include 40 jobs at an average wage of 110% of the average wage (or the state average wage, whichever is lower).
For more information about financial tools and incentives for recycling businesses in North Carolina, please visit http://portal.ncdenr.org/web/deao/rbac/financing or contact Stacy J. Smith, Recycling Business Development Specialist at 919-707-8135.
