Small Business Incentives
The City of Abbeville is seeking to encourage and induce new investment in the community that will strengthen the local economy, create new job opportunities and encourage the establishment and growth of new businesses. To achieve these objectives the Community Development Department, in conjunction with the City Manager’s Office, has prepared this Small Business Inventive Plan that identifies the goals and methods of achieving those objectives. This plan has been developed to bring about positive economic, social and cultural impacts within the City, enhance the quality of life of the City's citizens, and encourage private investment through local Development Incentives. Given the competitive nature of economic development within the State of South Carolina and indeed the entire region, an incentive strategy, as outlined in this Small Business Inventive Plan, will be critical to ensuring the long term economic vitality of the City.
The following overview will go into some detail describing the funding mechanisms of the Business Incentive Plan; which can be broken down into four distinct parts; an Energy Efficiency Grant, a Business Grants Program, a Revolving Loan Fund, and a Large Investment Incentive.
The Energy Efficiency Grant is awarded in smaller amounts than the other grant programs and there are stricter guidelines for the usage of those funds, i.e. they must be used for building improvements such as roofing, windows, insulation, etc. (Estimated Economic Impact by 2025 nearly $50,000)
The Business Grants Program consist of three separate annual grant programs, which will essentially function as “conditional grants”; meaning that if the recipient upholds their terms, they will not be required to pay the grant back. However, should they not meet the terms of the grant they would be required to repay the funds. This helps to ensure that public funds granted out in this program are able to be recouped should a recipient move their business to another town, or simply not follow the terms of the contract. (Estimated Economic Impact of the New Business Grant Program by 2025 $710,000)
The Revolving Loan Fund is an account which will be established by the City, built up over the next decade, and will allow the City to loan businesses funds at a reduced rate. This fund will function very similar to the Grant programs, with the caveat that the funds must be paid back. (Estimated Economic Impact of the RLF Program by 2025 $244,000)
The Large Investment Incentive provision will be restricted to larger businesses which have established name recognition and will make a significant economic impact from their first day in the community or to current businesses making substantial expansions. (Difficult to judge the potential impact, this incentive will be very business specific)
Justification: Having recognized that the establishment, growth, and success of a small business is first predicated on market demand for the products or services being provided, as well as sound management and financial stability; it has also been recognized by the City that the Business Incentives outlined in this plan will facilitate a business friendly climate while helping City businesses reinvest in themselves, jumpstarting new private investment, unlocking the City’s economic potential, and ensuring that the City’s socio-economic inventory continues to grow and thrive.
(All Grants & Loans)
The City will accept applications beginning in FY 2019. Eligible businesses and commercial property owners will submit an application, which will contain the intended use of Funds, to the Community Development Department by February 28th each year (Should the 28th fall on a weekend, applications will be due the following Monday). This application process will be available entirely online with paper copies available as well. Applications will then be reviewed by a selection committee consisting of the City’s Community Development Director, Assistant City Manager, and Finance Director. Three finalists will be chosen and asked to present to the committee at a to be determined date each May. Decision notifications regarding applications would be sent out by May 31st and funds would be dispersed thereafter. Priority will be determined based on need, as well as on those businesses being able to provide matching funds. Submission of an application is NOT a guarantee of Funding.
All Grants and Loans require a $100 Application Fee as well as fees to cover the costs of background checks, etc.
Eligible Applicants are as follows:
- Small Businesses as defined by the City of Abbeville (15 Full Time Employees or less)
- The Business must be located within the city limits of Abbeville
- The Business must be For-Profit
- Applicants must agree to provide all information and business records requested
- All principals or owners must be willing to provide personal guarantees
- Applicants who have been in default on previous loans or payments to the City are not eligible to receive funding
- Minimum Credit Score. The City requires a minimum credit score of 600 to be eligible to apply for any loan
- In order for a current loan recipient to be eligible for an additional loan, the applicant must meet the following minimum criteria:
- Minimum 50% equity requirement
- Previous loan must be either paid off or have been in repayment for at least 2 years with no late payments or defaults
- Business must be identified in a target area of the City of Abbeville
- Business is unable to obtain funding from private sources
- Must provide bank statement guaranteeing the availability of matching funds
Physical Applications for grants and loans will consist of:
- Well Developed Business Plan Including:
- Detailed projection of earnings for the next 3 years
- Incorporation documentation for incorporated businesses
- Verification of current number of employees
- Business Statements for the past 3 years and interim statements for the current year
- Personal financial statements for all principals of the business
- Federal tax returns for the past 3 years and an interim statement for the current year
- If tax returns for the past 3 years are not available, the City may require personal tax returns
- Three most recent months of bank statements for the business; for startups 3 months of personal bank statements are required for all business principals
- Project Details
- If possible, projects will utilize local labor, contractors, etc. ensuring these funds remain in the local economy
- Applicants need to submit cost estimates from a certified contractor to justify request
- Application fee of $100
These applications can be found online. City staff may request additional documentation during the application process.
- Adequate assurances are given that the incentive could be repaid based on proper terms and conditions
- Adequate assurances are given that the loan, grant, or incentive is given to accomplish an improvement which is warranted in light of current market conditions, past performance, and future projections
- The applicant must obtain the minimum private commitment prescribed by the specific funding source
- The applicant’s credit, capacity, and collateral must be adequate
- Business data provided by the applicant should show the business as profitable, solvent, and efficient
- Applicant must demonstrate funding to complete the project prior to reimbursement through the grant program
- Applicants may seek out third party lenders for interim financing
- Proposed improvements must meet federal guidelines
- No conflicts of interest or perceived conflicts of interest can be present
- The business or organizations is not owned or operated by a member or direct relative of the governing board or city staff of the City of Abbeville. Direct Relative is defined as spouses, parents, grandparents, uncles, aunts, children, siblings, nieces, or nephews, whether by blood, adoption, or marriage.
- Preference will be shown to applicants which demonstrate the following:
- Commercial and/or business activities which have a significant economic benefit
- Acquisition and renovation of older buildings in a target area
- Business involving new technology
- Applicants with high job and private to public dollar leveraging ratios
Verification and Disbursement of Funds
Businesses which apply for and receive funding must provide evidence that the submitted project has been carried out to completion in order to receive grant reimbursements. The required evidence will consist of:
- Before and after photos – (Before Photos should also be submitted with Application)
- Proof of payment (Cleared Check, Credit Card Transaction Receipt, etc)
- Signed Verification letter by Vendor or Contractor
Once awarded, funds will be disbursed in the form of reimbursements. These reimbursements can occur in increments of 25%, 50%, or 100%. As previously stated, proof of the completed work must be provided in order to receive the reimbursement.
*Loan funds will be given out up front; verification of work is still required.