Robust Financing For Business
Ohio is a state that was built on big ideas. Entrepreneurs developed our auto-parts and tire and glass industries, and they’ll be the ones who create the next generation of innovative companies that call Ohio home. On top of the great ideas they possess, entrepreneurs need money to act on those ideas.
So we’ve cultivated a unique funding ecosystem that brings together a full range of capital and services—public funding programs such as Ohio Third Frontier, low-interest loans and grants, tax incentives and venture capital—that align perfectly with an expanding company’s financial needs.
Ohio’s business climate has noticeably warmed as a result: Ohio has placed in the top four among all 50 states as ranked by Site Selection magazine each of the last eight years. According to the nationally recognized “Pollina Top 10 Pro-Business States” report in 2010, Ohio ranked 8th in the U.S. for factors related to economic development and the quality of its financial incentives.
Ohio Provides Abundant Public-Funding Programs
Ohio wants innovators and innovative thinking. So in 2002 we created the Ohio Third Frontier, a well-funded and bipartisan initiative that lets established companies retool to create globally competitive products, and allows startups to survive the perilous incubation and demonstration phases of their development.
Funding Encourages Collaboration And Commercialization
Awarded grants pay for meaningful collaborations between these private companies, universities, medical centers and federal laboratories within Ohio. With heads put together, the efforts accelerate product commercialization and dramatically increase the availability of early-stage equity investment capital.
Ohio Has Extended Fund Third Frontier
Re-funded by taxpayers in 2010, the Third Frontier represents a long-term strategic commitment to growing the state’s research assets, improving the investment capital climate, and building a pool of talent that continues to make Ohio a preferred location for companies that have embodied a spirit of innovation.
Ohio Provides Millions In Venture Capital
Ohio has committed to growing venture capital availability with the Ohio Capitol Fund. This state “fund of funds” issues taxpayer-backed bonds to raise private money to invest in other venture-capital funds, which in turn invest in early-stage startups. Over five years the fund has committed $117 million to 22 private venture capital funds representing 260 portfolio companies, and has helped create or keep 1,900 jobs at 50 in-state companies.
Ohio Offers Generous Loans and Grants
Low-interest loans are available to companies for many of the typical capital costs that new or relocating businesses incur:] land acquisition and development; construction, expansion or renovation; and purchases related to technology, facilities and equipment. Grants are available to offset the costs of commercial site development, “green” alternative fuel installations, public roadway improvement, or initiatives that train workers to stay competitive and current in their fields.
Ohio Tax incentives Lower Your Cost of Business
Another way to fund a new company is to give tax dollars back. In addition to tax breaks for creating and retaining jobs within the state, Ohio incentives include credits for locating or expanding in an Ohio Enterprise Zone or designated communities; purchase of equipment for research, manufacturing or warehousing purposes; and research and development expenses. Ohio also helps out by offering tax credits to angel investors and other companies and
More Information
The Job CreationTax Credit is a refundable tax credit to companies generally creating at least 10 new jobs (within three years) with a minimum annual payroll of $660,000 that pay at least 150 percent of the federal minimum wage. The tax credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program, and is applied toward the company’s commercial activity tax liability. Should the amount of the credit exceed the company’s commercial activity tax liability for any given year, the difference is refunded. A business must apply for the credit before committing to the project. Applicants must be approved through the Ohio Tax Credit Authority before hiring begins.
The Ohio Enterprise Bond Fund provides revenue bond financing through an S&P rated fund, whereby proceeds from the sale of bonds are loaned to companies for fixed-rate, long-term capital asset financing. Rates are market-driven and fixed prior to funding. Loan terms range between seven to 10 years for equipment and 15 to 20 years for real estate. Up to $10 million in financing is available through the program.
Business Grant programs
- Ohio Job Ready Sites Program
- Economic Development Grants
- Roadwork Development (629)
- Alternative Fuel Transportation Grant
- Community Investment Funds
- Minority Business Bonding Program
- Rapid Outreach Grant
- Community Block Grants
- Workforce Guarantee Program
The Job RetentionTax Credit is a non-refundable tax credit to companies retaining at least 500 full-time jobs in Ohio. Companies must also commit to a fixed-asset investment of $50 million for manufacturing and $20 million for corporate and professional services.The credit is measured as a percentage of the state income tax withholdings for all employees retained under the program.The tax credit rates for approved projects can be up to 75 percent for 15 years. A business must be approved for the credit by the OhioTax Credit Authority before committing to the project.
The 166 Direct Loan provides loans for land and building acquisition, construction, expansion, or renovation, and equipment purchases for eligible businesses.The program provides low-interest loans up to $1.5 million.
Loan and bond programs
- Research and Development Investment Loan Fund
- Ohio Enterprise Bond Fund
- 166 Direct Loan
- Regional 166 Direct Loan
- Innovation Ohio Loan Fund
- Urban Redevelopment Loan
- Ohio Capital Access Program
- Ohio Minority Business Direct Loan Program
- Rural Industrial Park Loan
- Volume Cap