Related Subsections


Taxes & Incentives

Economic Development Financing Products

Industrial Development Bonds  Most communities located in the Southeast Industrial Development Association region have economic development authorities/ industrial development boards in place that can provide low interest, tax-exempt industrial development bond financing for the acquisition of property, building construction and equipment purchases. Bonds can be used for manufacturing facilities, and up to 25% of the bond issue can be used for ancillary facilities (office, warehousing, etc.) at the same location as the manufacturing facility. Eligibility depends on strength and credit of locating and/or expanding company, type of business, investment and quality job creation.

Small Cities Community Development Block Grant (CDBG) Funds  Georgia, Tennessee and North Carolina have CDBG funds available for economic development loan and grant programs. These funds are awarded for infrastructure grants and building or capital loans to assist industrial manufacturing companies in locating and expanding operations in their communities and providing jobs to their citizens. Terms and conditions of the CDBG will depend on the scope of the project and the criteria of the individual state.

Tennessee Valley Authority Economic Development Loan Fund   TVA makes available to communities throughout their power service area gap financing low interest economic development loan funds. The level of funding is based on $5,000 per job created within the first 5 years up to 25% of the project cost not to exceed $2 million. Loans are for fixed assets only with a maximum of 10 yearsand are typically below market rate.Specific rates are determined on a case by case basis after consideration of the loan evaluation criteria.

Small Business Administration

SBA 504  Long-term financing tool for economic development in a community that creates or retains 1 job per $50,000 of debenture proceeds. Eligible companies are for-profit businesses that do not exceed $7.5 million in tangible net worth and do not have average net income over $2.5 million for the past 2 years. Maximum limits on the SBA portion of the project is $1.5 million to $4 million for a period of up to 20 years based on current market rate for 5 and 10-year Treasury issues. SBA provides a 100% guarantee on up to 40% of the eligible project cost.

7(A) Loan Guaranty Program  SBA provides a 75% (80% if total loan is $100,000 or less) guarantee up to $1.5 million to for profit businesses that meet SBA size standards; show good character, management expertise and commitment, and an ability to repay. Loan proceeds may be used for expansion/renovation, construction of new facility, purchase land or buildings, purchase equipment, fixtures, leasehold improvements, working capital, refinance debt for compelling reasons, seasonal line of credit and inventory. Terms depend on the ability to repay, generally working capital is 7 years; machinery/equipment; real estate, and construction up to 25 years. Interest rates are negotiable with lender; loans under 7 years maximum are typically at prime + 2.25%; 7 years or more, maximum 2.75% over prime; under $50,000 rates may be slightly higher.


Rural Development Business & Industry Loans  The Business and Industry (B & I) Guaranteed Loan Program guarantees loans by eligible local lenders to businesses to benefit rural areas. Loan guarantees are limited to a maximum of $10 million per borrower and are typically for up to 80%. Eligible loan purposes include:

  1. Acquisitions, construction, conversions, expansions, repair, modernization or development costs.
  2. Purchase of equipment, machinery or supplies.
  3. Start-up costs and working capital.
  4. Processing and marketing facilities.
  5. Pollution control and abatement.
  6. Refinancing for viable projects, under certain conditions.