Can I get any advantages if my business is located in a depressed area?
As a business owner, you should always be looking for any help, or advantages you can get. One question you will want to ask is: Can I get any advantages if my business is located in a depressed area?
The answer is usually Yes! In most cities, if you build or expand your business in a depressed area, the city will be more than happy to help you out some with a few of the taxpayer's dollars. However, there are specifications that have to be met, and a process that you must undergo to get this help.
In general, you will want to go to your city building and talk to someone in the city's business recruitment office. This office is specifically designed to entice business to come in and develop in some of the under-developed, or depressed areas. They will help you to choose an appropriate site for your business, as well as offer great resources in the forms of referrals to local employers, industry trade groups, employment development agencies, local lenders, real estate brokers and developers.
So, what are some of the other advantages you can get for locating your business in a depressed area? Well that really depends on the area, some places are more aggressive about helping such areas out than others, but in general you can hope for some of the following:
- Streamlined building permitting process. Sometimes it takes months to get all of your permits through the legal and government channels. In some cities you can get this process expedited if you build in a depressed area. So, instead of 4-6 months, you are looking at 14 days. This is a huge plus.
- A one-stop development review meeting with all city departments to evaluate your proposed project. If you are building in a depressed area, some cities will prioritize your plans, and set up a meeting with all of the city departments you need to work with, so you can show them your proposed project and get feedback before you start.
- Someone assigned to you to help you facilitate your project. This is a person that acts as a liaison, an helps to push your paper through the city as quickly as possible, as well as help you avoid unforeseen problems.
- Help with creative financing mechanisms designed to facilitate project development. In other words, some cities have special loans and funding for businesses that will build in depressed areas.
- Free advertising: generally in the "Our Town" section of the newspaper there will be a piece about any business that the city is helping to get started in depressed areas, this is a great form of free advertising, and you will be getting attention you would not get otherwise, which can lead to higher sales.
- Relocation incentives, such as development incentives, financing, fee deferrals and credits.
- Some cities will offer gap financing to small businesses in conjunction with conventional lenders. So, if you do not qualify for all that you need, they will help you fill in the gap if you build in a depressed area.
- Funding for real property acquisition, building construction, capital equipment, furnishings and working capital for companies creating jobs in depressed areas. For example, in West Sacramento, for each new full time equivalent position created, the company qualifies for $35,000 in loan funds subject to underwriting criteria.
- More attractive interest rates. If you build in a depressed area, you could qualify for a point deduction in interest, etc.
- Assistance for businesses in retraining new or existing employees, by utilizing existing training programs or reimbursing employers for company provided training.
- Tax credits. Sometimes the benefit of building in a depressed area is that you get off from paying your property and business tax for a year or two, sort of as a trade for building in these depressed areas.
As you can see there are possible advantages you can get if your business is located in a depressed area, however, because of the advantages offered, there is a process, a minimal time you will stay in area, etc.