Business Financing:
We get it, starting a business has challenges and one of the largest challenges if finding the right financing for your business. Our team at the TVID are experts working with a variety of different funding sources. Whether you need financing for real estate, infrastructure/building, workforce training, or working capital our team can help guide you in developing a funding scenario that works best for you and your company.
Montana has a series of incentives to attract and cultivate businesses in the Tobacco Valley/Great Eureka area. Incentives will vary by industry and size of business as well as chosen location. We at the Tobacco Valley Industrial District look forward to working with you to navigate through the programs.
The following is a synopsis of the more utilized programs in the State.
The Big Sky Trust Fund (BSTF) fosters development of good-paying jobs for Montana residents and promotes long-term, sustainable growth in Montana. There are two categories of the BSTF program:
- Category 1 Grants are available to projects that create net new qualifying jobs that pay the lesser of 170 percent of Montana’s current minimum wage or the current average County wage, which does include the value of the employee benefits.
- Category 2 Grants are Planning grants and are available to assist in feasibility studies, the development of business plans, creation of preliminary architectural or preliminary engineering reports.
Montana law states that “The Board of Investments shall endeavor to invest 25% of the State’s Coal Tax Trust Fund in Montana economy, with special emphasis on investments in new or expanding locally owned enterprises”. To achieve this objective the Board of Investments has designed a series of loan programs that can be tailored to meet individual needs of borrowers. These loans are tailored for value added businesses, infrastructure, and other needs.
The Primary Sector Workforce Training Grants provide funds to primary sector businesses for training of new, full-time and part-time employees. Primary sector is defined as a business with at least 50 percent of its sales from outside of Montana, or a manufacturing company with 50 percent of its sales from companies that have 50 percent of their sales outside of Montana. The grant review committee may award workforce training grants up to $5,000 per eligible full-time trainee, or $2,500 per part-time trainee. The primary sector businesses must provide education or skills-based training and must pay the trainees’ wages and benefits of at least the lower of the average county wage or average state wage.
The Montana Distressed Wood Products Industry Recovery and Stabilization Program was created in 2009 with federal and state funding to help businesses in this industry affected by the recession to retain or create jobs. Payments into the fund are available as affordable loan financing for economic development projects in Montana.
The Federal Small Business Administration offers a variety of loan programs for specific purposes. The State SBA office also partners with the Montana Department of Commerce and local partners to create the Small Business Development Center Network. Flathead Valley Community College hosts the SBDC that covers the Eureka area. The SBDC can assist in development of business plans, general business counseling, financial projections, and more. www.nwmontanabusiness.com; sbdc@fvcc.edu; 406-756-3836.
The New Market Tax Credit is a federally funded program providing subsidy financing to a wide variety of projects in low-income communities. The NWMTC program gives taxpayers an aggregate 39 percent federal income tax credit over seven years against equity investments made in designated community development entities. MoFi administers a New Market Tax Credit for Montana and Idaho.
A qualifying project can receive 18–23% of the financing it needs in the form of a very low interest loan that, ultimately, can be forgiven and would not have to be repaid.
Criteria for NMTC projects:
- Project is in a qualifying census tract, OR (2) Project will mainly hire or serve low-income people
- Project is over $4 million in total project costs
- No more than 80% of the Project’s ongoing revenue will come from housing rental income
- Project can demonstrate it needs NMTC financing assistance
- Project will benefit the community
Montana has a network for regional microbusiness development corporations that provide financing, training, and business assistance to help very small businesses expand or get started. Montana West Economic Development overseeing this program for Northwest Montana. Applicants generally must provide a business plan and other evidence to demonstrate the economic feasibility of the business, and the ability to repay the loan from cash flow generated by the business. The intent of the program is to finance economically sound businesses that are not otherwise able to obtain financing from sources such as local banks. Please note that interest rates are generally higher than bank rates, slightly.
The Montana Department of Commerce’s Office of Tourism and Business Development houses a number of technical assistance and financial programs. As mentioned above they are a partner in the Montana Small Business Development Center Network and also run a variety of Indian Entrepreneurship programs. The Office of Tourism and Business Development also provides assistance for tradeshows, international marketing, exporting, and the development of capital and intellectual property-promoting technology commercialization.
USDA-Rural Development has a series loan guarantees to improve, develop or finance business, industry and employment in an effort o improve the economic and environmental climate in rural communities. The goal is to bolster the existing private credit structure through guarantees of quality loans that will provide lasting community benefits.
Rural Development also has programs for energy assistance, workforce housing, and value-added agriculture production.