Maximizing Benefits from Government Programs: Capitalizing on Available Resources for Small Businesses

• Many federal, state, and local incentives have been created in recent years to boost small-business formation and activity
• The list of grants, tax credits & deductions, and initiatives is long, and it can be head-spinning to know where to find them
• This guide helps spot opportunities and offers tips to improve your business’s chances of approval

Small business owners wear a lot of hats. You run daily operations, manage cash flow, have a hand in hiring, and direct long-term projects. Part of the gig is not only keeping Uncle Sam happy but rightly taking advantage of all the programs available to today’s entrepreneurs. Potential tax breaks and government incentives increase for real estate investors, too. Indeed, a wealth of state, local, and federal subsidies is available to help lighten your load and fuel your firm’s profitability for today and tomorrow.

Financial relief, tax benefits, and other resources are potentially at your disposal right now. Are you pouncing on them? If not, I’ll show you where to look and how to qualify so you can make the most of what may be out there. It’s important to understand that these are not handouts. Rather, they are tools to help you thrive in what is increasingly a whipsaw macroeconomy. Let’s reach into the cookie jar to see what we come up with—it’s all about helping you boost your bottom line.

Why Government Programs Matter for Your Business

Small business is the lifeblood of America. I work with company owners each day, and they just want to get stuff done without the G-men getting in their way. I agree with that approach, but it is critical to recognize that not all of the fed’s handy work is red tape.

Government programs and incentives are intended to stimulate and sustain economic activity, support entrepreneurship, and encourage investment. What’s more, tax breaks are available to real estate investors—an area many of our clients focus on within their financial plans.

Government initiatives come in many forms, each designed to address specific niches of small-business activity. The first step is knowing where to look. For almost all areas, the US Small Business Administration (SBA) is a great starting point for conducting your own due diligence. Here are the most common types of financial assistance:

1. Grants

Ok, grants are kind of like handouts—I won’t sugarcoat that one. They don’t have to be repaid and are offered by federal, state, and local governments for businesses of many breeds. Research & development, energy efficiency, and hiring activities could each qualify for a grant.

• Tax Incentives & Credits

Many authorities and agencies provide tax breaks for small businesses investing in infrastructure, hiring employees, or operating in certain critical or otherwise disadvantaged industries. For real estate investors, there are community development programs.

Clear Harbor works with clients to make tax-smart property investments that qualify as Opportunity Zones, which offer tax deferral and potential exclusion on capital gains. There is also the Energy Efficient Commercial Buildings Deduction (Section 179D), which incentivizes small-business property owners to make certain upgrades to commercial buildings.

• Low-interest Loans and Loan Guarantees

Many tax incentives get in the weeds. The SBA and other government agencies offer more straightforward benefits, such as low-interest loans or easily accessible funding mechanisms for which larger corporations may not qualify.

You will usually find competitive interest rates on 7(a) loans and 504 programs (for long-term, fixed-rate financing), but the SBA has other resources, including technical assistance. The State Small Business Credit Initiative (SSBCI) helps point you to where to get the best funding through its support network.

• Workforce Development and Training Assistance

If you want to grow your business, you’ll need more team members. Federal programs are available to provide funding to train and upskill employees and reduce the cost of workforce development.

Many state and local municipalities offer targeted grants, tax abatements, and subsidies to employ their people and revitalize neighborhoods. This is definitely an area to dig into if you plan a major expansion project.

Knowing Where to Look & Assess Eligibility

It’s a long list of potential opportunities and programs, and finding ones that fit your business can feel overwhelming. It’s challenging to find time to parse the legalese and fine print (particularly when you are running a business), but here are some resources and helpful tips for determining program eligibility:

• Check Grants.gov, the SBA, and your state’s economic development agency. Florida, Alabama, Georgia, and Mississippi have websites and searchable databases to sift through funding sources.
• Reach out to local business support organizations, such as your chamber of commerce and Small Business Development Centers (SBDCs). Industry associations and trade groups have up-to-date information on the latest tax breaks as well.
• Assess your business’s characteristics. Many grants depend on the size and revenue of a firm—tracking your company’s net sales, employee count, industry classification, real estate footprint, and other traits aids in finding the best-fitting special financing programs.
• Where you operate, and the types of projects you work on (or plan to build out) also matter.
• Use online matching tools to connect your business with potential grants and tax credits—your financial advisor can play a role here, helping you gather records, business plans, and other supporting documents to prove eligibility.

How to Get Approved

The task of maximizing small-business benefits can be exhausting—like helping your high-school child apply for dozens of college scholarships (the tips and tricks are actually similar). Once you have homed in on the incentives that could benefit your business, the real work begins. Here’s how to get the feds to say yes to boost your profits the most:

1. Put on the Breastplate of a Strong Business Plan

Yes, maximizing credits and deductions can feel like a Biblical battle. Many grants require detailed business plans, financial statements, and a thorough explanation of how you will use the funds. Have it all at your ready.

• Apply Early

Some tax abatements and credits have deadlines or firm cutoff dates. Not only is applying early crucial but keeping a calendar is sometimes needed to track them. Remember that you aren’t the only one going after certain funding chances, so apply early for the best approval odds.

• Demonstrate Impact

There’s a bit of art to this whole game—those in charge of doling out the dough may want to hear a feel-good story about how your business will help the community, create jobs, or contribute to society’s development. The Renovate Main Street grant, specifically the HOPE VI Main Street Program, is just one example. The more you help your neighbors, the better your odds of landing a grant.

• Stack Incentives

Aside from the touchy-feely stuff, you can pair programs to stack benefits. For instance, an Opportunity Zone investment with a Section 179D deduction can reduce your tax liability and bring down upfront costs with an energy-efficient upgrade. Being strategic and shrewd can pay off big league.

Avoiding Mistakes

No matter how you go about the process, cross all your Ts and dot each I. Failing to maintain compliance can DQ you from lucrative offers. Moreover, applying for the wrong program wastes valuable time, so be sure each program you are curious about is a good fit. With just about anything tax-related, keeping meticulous records is essential.

The Bottom Line

Small business subsidies are targeted and potentially powerful tools for entrepreneurs looking to grow their businesses. They aren’t presented on a silver platter, though. You must go out and grab them. Start by exploring federal resources like SBA.gov, and be sure to go local by checking with municipal offices in your area. Deadlines come fast, so stay on the ball. By identifying, qualifying for, and capitalizing on these programs, you can reduce costs, enhance your properties, and position your business for long-term growth.