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The City of Pinckneyville
is active in seeking state and federal grants and loans which may be used
as long-term, low-interest debt financing for both large and small firms.
Funds for most business assistance programs are limited and only the most
competitive applications are funded. Participation in many of these assistance
programs is dependent on the creation or retention of jobs. The agencies
providing the assistance should not be considered primary lenders by the
applicant, but should be considered in conjunction with conventional bank
financing. For additional information call us at (618) 357-8927 or send us an e-mail.
Brief summaries of some of the key economic
development programs, which are available, are listed below.
ENTERPRISE ZONE
PROGRAM
The Illinois
Enterprise Zone Program is designed to stimulate economic growth and
neighborhood revitalization at the local level in economically depressed
areas of the state through various business incentives such as streamlined
permit services, selective tax abatements and tax exemptions, and other
incentives. Commercial or industrial firms, which locate or expand in
enterprise zones can benefit from a combination of state and local tax
incentives, regulatory relief, and improved government services. Enterprise
zone benefits are as follows:
- Local property
tax abatement of up to 100 percent on property improvements, depending
on local ordinances
- Local waivers of portions of fees and regulations concerning zoning,
licensing, etc.
- An exemption from the state and local sales tax on building materials
incorporated into a structure within the zone (if materials are purchased
from retailers in the zone).
- A 0.5 percent investment tax credit on investments made in the zone
(which may be carried forward up to 5 years).
- A $500 tax credit for every economically disadvantaged or dislocated
worker hired, if more than 5 employees are hired (which may be carried
forward up to 5 years).
- An exemption from state income tax on dividends paid by businesses operating
in the zone for interest received on loans made to zone businesses.
The City of
Pinckneyville in conjunction with the Perry County and other surrounding
areas was designated an enterprise zone on July 1, 1991, comprising 11.5
square miles. The zone offers property tax abatement, waiver of fees,
and homesteading and shopsteading.
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TAX INCREMENT FINANCING
Tax Increment Financing (TIF) is a financing technique that allows municipalities
to carry out redevelopment activities on a local basis. TIF allows a community
to capture the increase in various local property taxes that result from
a redevelopment project to pay for public and some private costs involved
in the project. Available financing costs for public activities include
but are not limited to planning, architectural engineering, and other
professional services; land acquisition and site clearance; public improvements;
and rehabilitation of existing buildings and fixtures. Tax increment proceeds
can also be used directly for private business incentives such as interest
costs incurred by redevelopers in a redevelopment project, provided that
they do not exceed 30% of annual interest cost incurred by TIF project
redeveloper. The City of Pinckneyville has prepared a Tax Increment Redevelopment
Plan establishing a tax increment financing area. This area consists of
approximately 650 acres of property and includes generally the downtown,
commercial and residential areas on South Main Street, commercial and
residential areas west of downtown and acreage for industrial uses east
of downtown.
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LOCAL REVOLVING
LOAN FUNDS
The City of Pinckneyville operates a local revolving loan program to provide
financing to local businesses. These funds are locally administered pools
of money used to make loans or equity investments. Funds can be used for
working capital, land acquisition, building acquisition, rehabilitation
or construction, and the purchase of machinery and equipment. As the money
is repaid by the borrowers, it is used to make other loans or investments.
In this manner, the fund becomes an ongoing or "revolving" financial
tool.
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STATE ASSISTANCE
AVAILABLE COMMUNITY DEVELOPMENT ASSISTANCE PROGRAM
The Community
Development Assistance Program (CDAP) helps communities meet their
economic development, housing, and public infrastructure needs. Direct
grants are provided on a competitive statewide basis to eligible applicants
for a broad range of projects in the primary categories of public infrastructure,
housing, and economic development. To help promote economic development,
the CDAP program provides low-interest, subordinated loans to projects
that create or retain jobs for low and moderate-income workers. The funds
are granted to local governments, which then make loans to businesses,
which are repaid to the local government. The maximum loan under the economic
development component is $500,000. One job must be created or retained
for each $10,000 of program funds utilized. Funds can be used for land
and buildings, infrastructure improvements, construction or renovation
of facilities, machinery and equipment, and working capital.
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SMALL BUSINESS
DEVELOPMENT LOAN PROGRAM
The Small Business
Development Program (SBDP) provides direct financing to small businesses
for expansion and subsequent job creation or retention financing through
long-term, fixed-rate loans. Funds can be used for the acquisition of
land and buildings, purchase of machinery and equipment, inventory, working
capital, and for construction, renovation or leasehold improvements. For
the purposes of this program, a small business is one which has, including
its affiliates, fewer than 500 full-time employees.
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ILLINOIS DEVELOPMENT
FINANCE AUTHORITY
The Illinois Development Finance Authority (IDFA) is a self-supporting
state agency created to expand economic development in Illinois by providing
access to capital to Illinois businesses, local governments, and not-for-profit
organizations. For more information on programs such as industrial revenue
bonds, not-for-profit financing, direct loans, municipal leases, SBA loans,
and more, call the Illinois
Department Finance Authority at (312) 627-1434.
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ILLINOIS RURAL
BOND BANK
The Illinois
Rural Bond Bank provides low-cost capital to units of local government
for financing infrastructure and other public improvement projects. The
Bond Bank can also help local governments raise working cash and refinance
existing debt. All local governments (excluding home rule communities)
located outside Cook County are eligible to participate in Bond Bank programs.
Loans usually range in size from $100,000 to $2,000,000 and can be amortized
for up to 30 years.
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STATE TREASURER'S
COMMUNITY DEVELOPMENT PROGRAM
The Illinois Treasurer's Office targets state deposits where they will
be used to support community development projects. This use of taxpayer
funds pays dividends twice. First, deposits earn a good rate of return
for the short term. Second, they earn a long-term return many times greater,
in the form of a larger tax base, new jobs and a stronger economy. The
State Treasurer may deposit state funds in an approved Illinois financial
institution contingent upon the financial institution making a corresponding
loan to a qualified business at a favorable interest rate. The deposits
typically vary in size and carry a term of one to three years. Businesses
must maintain operations in Illinois; demonstrate benefits to the local
community; show that new jobs or other significant economic impact to
the local community will result from the community development deposit
and demonstrate ability to repay loan from business cash flow. For more
information about State Treasurer's Community Development Deposit Program
call: 312/814-1700.
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PRAIRIE STATE
2000 AUTHORITY
The Authority invests in
"at risk" Illinois companies and their workers who must retrain
in new technologies or quality / productivity improvement systems in order
to remain competitive. Grants may cover up to 50% of direct training costs
and low interest loans may cover up to 100% of those costs. Employee wages
are not covered by the grants or loans. The Authority is completely state
funded.
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ILLINOIS INDUSTRIAL
TRAINING PROGRAM
The primary purpose of the Industrial
Training Program (ITP) is to provide training assistance to benefit
companies, which are developing the skills of existing or new employees.
Grants can be awarded to reimburse up to 50% of the approved training
costs. ITP's primary clients are Illinois employers, although the trainees
benefit directly by achieving higher skill levels and sustained or enhanced
employment. Grants are awarded to individual companies, as well as to
intermediary organizations on behalf of multiple employers.
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ILLINOIS SMALL
BUSINESS GROWTH CORPORATION
The Illinois Small Business Growth Corporation (ISBC) is a statewide not-for-profit
entity, which provides long term, fixed-rate loans to healthy and expanding
Illinois businesses for fixed asset purchases under the SBA S04 Loan program.
Funds can be used for the purchase of land and buildings; building renovation
or construction; and the purchase of machinery and equipment. The Corporation
provides loans up to a maximum of 40 percent of the total project or up
to $1 million whichever is less. Projects are usually between $250,000
and $3 million and one job should be created or retained for every $35,000
of funds loaned. Other programs may be used in conjunction with Growth
Corporation loans to provide working capital or fixed asset financing
for larger projects.
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ILLINOIS
AFFORDABLE HOUSING TRUST FUND
The purpose of the Illinois Affordable Housing Trust Fund (HTF) is to
assist in the provision of affordable, decent, safe, and sanitary housing
to income eligible households. The program is designed to develop, coordinate
and distribute public and private funds to eligible households. HTF funds
will be made available, on a competitive basis, to both not-for-profit
and for-profit groups, units of local government and local housing authorities.
Funds can be used for the acquisition and/or rehabilitation of existing
housing, the adaptive reuse of nonresidential buildings, new construction
and other special needs categories. The loan limit is $500,000 per project
application. Grant funds are available when a project demonstrates a strong
very low and low income orientation.
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FEDERAL ASSISTANCE
AVAILABLE USDA RURAL ECONOMIC COMMUNITY DEVELOPMENT SERVICE
The USDA Rural Economic Community Development Service, formerly Farmers
Home Administration, is a federal agency whose purpose is to promote overall
rural development by offering various funding assistance programs. The
Business and Industrial Loan Program guarantees loans made by private
lenders to businesses in order to create or retain jobs in rural areas.
The loan guarantees of up to $10,000,000 are at a negotiated interest
rate for up to 30 years. The Community Facilities Loan Program provides
loans to construct, enlarge, or improve community facilities, which provide
essential public services to rural residents. Loans are available for
100 percent of project costs and can be made for up to 40 years.
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ECONOMIC DEVELOPMENT
ADMINISTRATION
The Economic Development Administration (EDA) is a federal agency whose
purpose is to stimulate the economic development of depressed areas. EDA
makes available a variety of grant, loan, and technical assistance programs
to help create or retain permanent, full-time jobs. To be eligible, an
applicant must be in a designated redevelopment area. (Pinckneyville is
located in such an area.) EDA provides grants to create new jobs through
the Public Works and Development Facilities Grants Program. Through the
Local Technical Assistance Grants Program, EDA provides grants to cover
the cost of providing information and data for evaluating, shaping and
implementing specific economic development projects and programs. The
Title IX Sudden and Severe Economic Dislocation Program is available in
any county impacted by a plant closure resulting in job loss.
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SMALL BUSINESS
ADMINISTRATION
The federal Small Business Administration (SBA) Guaranteed 7 (a) Program
can guarantee up to 90 percent of bank loan if the loan is less than $155,000.
SBA can guarantee 70 to 85 percent of loans in excess of $155,000 up to
a maximum SBA exposure of $750,000. Interest rates may not exceed 2 percent
over prime if the loan is for less than seven years, and 2 percent over
prime if the term is greater than seven years.
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JOB TRAINING PARTNERSHIP
ACT
The federal Job Training Partnership Act (JTPA) program helps eligible
persons, including those who face barriers to employment, to become productive
members of the labor force. JTPA provides funds to local Service Delivery
Areas for worker training and retraining. The funds can be used for classroom
training (on or off site), on-the-job training and customized training.
JTPA can provide direct reimbursement to a business for up to 50 percent
of wages of eligible individuals during on-the-job training and can subsidize
up to 100 percent of other employment and training costs incurred by education/training
agencies serving eligible workers. There is no dollar limit to the amount
of assistance per company. JTPA funds are administered in the Pinckneyville/Perry
County area by Service Delivery Area Management Training and Consulting
Corporation Inc. (Man-Tra-Con).
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