State and Local Incentives for Companies Locating in Oroville, CA.

Redevelopment

The City of Oroville Redevelopment Agency (RDA) administers redevelopment project areas within the Oroville Area. RDA funds may be available to assist commercial or industrial development projects located within the specific boundaries of one of the RDA project areas. Development projects are required to meet certain financial and employment goals in order to qualify. Typical eligible activities include land or building acquisition, loan guarantees and subsidies for publicly-owned infrastructure Funds are limited and agreements require approval of the Agency. Call Sharon Atteberry at the City of Oroville at (530) 538-2404 for more details.

Enterprise Zone

Enterprise Zones are areas that qualify as being economically depressed in California that is designated as such by the California Trade and Commerce Agency.  The purpose is to encourage and stimulate growth investment in the area. Taxpayers that conduct within the areas of an Enterprise Zone may qualify for special tax incentives. Call John Peace at Oroville Economic Development Corp. at (530)-533-2960 for more details.

Community Development Block Grants

Local governments sometimes choose to invest some of their block grant funds in local projects that have a significant economic development or job creation benefits. Typical eligible activities include land, building or working capital loans, loan guarantees and grants for publicly owned infrastructure. Call Pat Clark at the City of Oroville at (530) 538-2403 for more details.

Financing Assistance

Several local state-sponsored financial assistance programs are available to firms wishing to locate, expand or modernize facilities in Oroville. The types of assistance available can be grouped into three broad categories: business financing, environmental loans and public infrastructure financing.

Business Financing

Business Financing is provided directly to companies in order to undertake various projects. Each program has its own specific requirements for qualification and terms for approval. Listed below is an overview of each program and the basic requirements. Contact the Butte County Economic Development Corporation at (530) 895-2728 for additional information on how to access most of these programs.

Industrial Development Bonds

California cities, counties and state government have the authority to offer low interest financing to businesses locating in their communities through the use of tax-exempt industrial revenue bonds. An eligible bond project can be the construction of a new plant, or replacement of all or part of an existing plant. Industrial activities eligible for financing include assembly, fabrication, manufacturing and processing.

The primary advantage of industrial development bonds is that the financing provided bears an interest rate significantly lower than conventional methods (the lower interest rate is the result of the tax exempt status of the securities), the bonds are long term 15-30 years maturity, and are assumable.

Companies taking advantage of industrial bond financing receive approval for a project through a local industrial development authority or the California Economic Development Financing Authority. The authority make findings regarding eligibility and public benefits pertaining to the project before authorizing the tax-exempt status of the bonds.

To qualify for industrial development bonds a borrower needs to meet certain eligibility criteria: 1) the firm must be engaged in a manufacturing, processing or value-added industry, 2) the total project cost should be at least $1 million and may not exceed $10 million, 3) the borrower must secure a standby letter of credit for 100 percent of the issue value from a bank with a substantial credit base, 4) the capital expansion must provide a public benefit such as creating new jobs; and 5) the project must have city or county support.

The proceeds from a bond issue can be used to pay for virtually all costs incurred by the company for its project including the financing of land acquisition, building construction, machinery and equipment, and other incidental costs as well as all expenses associated with the financing and issuance of the bonds. In addition, 5 percent of the net proceeds of the bond sale can be set aside for the working capital needs of the business.

Pollution Control Financing

The Pollution Control Financing Authority, located in the State Treasurer's Office, provides businesses in California with an affordable method of financing pollution abatement equipment, waste disposal and resource recovery facilities for the management of environmental pollution hazards. The Authority offers tax exempt or taxable bonds and loan portfolio insurance to businesses seeking financing for qualified pollution control projects. The entire cost of a pollution control project, including land and buildings attributable to the project, equipment, engineering fees and the program can fund related financial and administrative expenses.

Small Business Loan Guarantee

The Small Business Administration's loan guarantee program promotes job retention and creation and encourages small business entrepreneurship particularly among minority, women, and disabled persons. A "small business" is a manufacturer of 500 employees or less, or a retailer with gross international sales ranging from $3.5 million to $14.5 million depending on the industry. The State of California's Small Business Loan Guarantee Program differentiates itself from the U.S. Small Business Administration's programs by providing a niche in guarantee financing on revolving lines of credit, small loans and agricultural loans. Businesses applying to the program receive funding from a private lender. This loan is guaranteed by one of eight nonprofit regional development corporations organized under the California Corporations Code.

All loan proceeds must be used in California and the proceeds cannot be used for entertainment enterprises or speculative purposes. To qualify a borrower must not be able to obtain credit based solely on his or her own financial condition, but must demonstrate reasonable capacity to repay the loan. The maximum guarantee is 90 percent of the loan value not to exceed $350,000 and the maturity of the guarantee is not to exceed seven years. The borrower and the lender negotiate interest rate and loan origination fees. Contact our public lending partner Tri-County EDC at (530) 893-8732 for additional information on accessing this program.

SBA 504 Loans

SBA (Small Business Administration) 504 loans are marketed, processed, closed and serviced by Certified Development Corporations (CDC) throughout California. Through the SBA 504 Program, CDC's provide 90 percent real estate financing with a special emphasis on rural areas and distressed urban areas. The second mortgage, long-term, fixed-rate financing nature of the program allows banks to participate in the business's expansion by reducing their risk on real estate exposure. The benefit to the businessperson is the lower down payment requirement (10 percent) and the longer-term, fixed-rate second mortgage, which translates into, reduced monthly payments.

Accredited Lender Program CDC's provide streamlined loan processing/servicing and receive accelerated credit decisions from SBA. Premier Certified Lender Program CDC's accept financial responsibility for loans they underwrite and need only limited review from SBA. One full time equivalent job for every $35,000 of SBA funds is desired within two years of project funding. Individual job goals can be modified if the CDC's overall portfolio meets these requirements. At that point, community impact and public policy goals come into play.

Eligible 504 loan proceeds include the purchase of land, existing buildings, new construction, and the acquisition of machinery and equipment with a ten-year useful life. The private sector participant takes 50 percent of project cost and takes a first lien on assets pledged as collateral. The SBA takes a second lien on assets and takes 40 percent of project cost, up to $1 million in some cases. Owners inject 10 percent in the form of cash or equity in real estate. Contact our public lending partner Tri-County EDC at (530) 893-8732 for additional information on accessing SBA loan programs.

California Capital Access Program

The California Capital Access Program (CalCAP) encourages banks to make loans to "near-bankable" California small businesses. The State Treasurer's Office, through the California Pollution Control Financing Authority (CPCFA), has committed to provide "loan loss" guaranty accounts to participating banks willing to make loans to small businesses with higher than conventional risk.

Since April of 1994 participating banks have made CalCAP loans and lines of credit available to thousands of California businesses in amounts ranging from $100,000 to $2.5 million. Banks give extra weight to the most recent year's results of a business instead of a several-year average. This benefits the most profitable and fast-growing companies. With CalCAP's flexible guidelines, business assets and personal guarantees are acceptable as collateral when other collateral is not available.

California Capital Access Program

A business's primary location must be in California with the business activity generated from the loan created and retained in California. Businesses must have fewer than 500 employees with more than 50 percent of the employees working in California and have at least 25 percent of its sales derived from a CalCAP eligible industry. Eligible SIC codes exclude most service and retail businesses.

California Technology Investment Partnership Program

The mission of the California Technology Investment Partnership Program (CalTIP) is to accelerate the development of new, globally competitive technology-based commercial products and services from California firms and consortia. The CalTIP program provides matching grants and technical assistance to California-based businesses, consortia, nonprofit organizations and public agencies for projects qualifying for federal funds through cost share technology-based projects from a variety of federal agencies.

The Regional Technology Alliances (RTAs) have primary responsibility for evaluating and ranking the proposals from their designated geographical areas. If a proposal is statewide in nature, or if no RTA has been designated for a geographical area, applications may be sent directly to the California Trade and Commerce Agency's Office of Strategic Technology for evaluation and ranking. Call (916) 322-1394 for more details.

California Technology Investment Partnership Program

Following the evaluation and ranking of proposals by the RTAs, the Office of Strategic Technology convenes a peer review panel to recommend state funding commitments or endorsements by the Defense Conversion Council. The peer review panels are composed of industry representatives and technical experts, nonvoting representatives from each RTA and other members. All applications, which receive a positive endorsement from the Office of Strategic Technology's peer review panel, are presented to the Defense Conversion Council. The Council makes the final funding recommendations, which are transmitted to the agency responsible for administrating the funding source. Proposals are evaluated based on immediate and measurable ability to create jobs, clearly identified product line and market, inclusion of a training component for workers associated with the project, demonstrated links with other applicable programs, and whether the proposers and partners are small businesses. Contact the California Trade and Commerce Agency's Office of Strategic Technology for more information on this program.

California Export Finance Loan Guarantees

The California Export Finance Office (CEFO) helps small and medium-sized California companies finance their export sales by providing working capital loan guarantees to financial institutions. CEFO's guarantees cover up to 90 percent of an export loan, allowing for a maximum guarantee of $750,000 and a loan of $833,000. CEFO offers three types of guarantees: Pre-Shipment Working Capital Guarantee, Post-Shipment Accounts Receivable Guarantee; and a Combination Guarantee. CEFO guarantees support for short-term (up to 18 months) transaction specific working capital loans; single or multiple transactions (revolving line of credit); and cash loans/or the issuance of standby letters of credit. Contact the California Trade and Commerce Agency's Export Finance Office for more information on this program by calling (916) 324-5511.

Environmental Loans

California is committed to the preservation of the environment and has implemented various loan programs to help companies clean up the environment and implement environmentally friendly programs.

The loan proceeds must be used to repair, replace (includes acquisition and installation) or upgrade underground petroleum tanks only, with an allowance for ancillary equipment required by current regulations. The maximum loan amount is $350,000. Loans can be given for up to 100 percent of the total project cost. Contact the California Trade and Commerce Agency's Office of Small Business for more information on this program by calling (916) 322-1394.

Hazardous Waste Reduction Loans

Hazardous Waste Reduction Loans assist small businesses to reduce waste generation or to reduce the hazardous properties of waste generated through the acquisition or installation of equipment, facilities or use of different processes for this program. Proceeds can only be used to finance the hazardous waste equipment acquisition, installation and processes. The California Department of Toxic Substance Control, Pollution Prevention and Technology Development Division, must determine that the equipment or processes to be financed qualifies for this program. Direct loans for up to 100 percent of the project's costs with a maximum loan amount of $150,000 are available. The maximum term of the loan is seven years.

Recycling Loans

Any business or local government agency located in a Recycling Zone utilizing post-consumer or secondary waste material in their production process may apply for a recycling loan. Private businesses may borrow funds for acquisition of real property, equipment, leasehold improvements, working capital, or refinancing of onerous debts. Local government may apply for funds to finance public works infrastructure which directly supports these businesses. Each eligible business or local government agency may borrow up to 50 percent of the cost of any project with a maximum of $1 million. Contact BCEDC at (530) 895-2728 for more information.

Public Infrastructure Financing

Public infrastructure financing provides financial assistance to cities and counties for public infrastructure projects. Although not directly available to individual businesses, cities and counties can get public infrastructure financing and provide it to qualified businesses locating in their areas.

Thus, although an indirect manner of financing, public infrastructure financing programs should be considered by businesses conducting qualified projects in designated areas. Several public infrastructure financing programs exist.

Rural Economic Development Infrastructure Program

The Rural Economic Development Infrastructure Program (REDIP) is designed to promote the economic revitalization of rural California by financing public infrastructure improvements which lead to the creation or retention of permanent, private sector jobs through the retention, expansion and attraction of businesses in rural areas. The purpose of REDIP is to provide financing for the construction, improvement or expansion of public infrastructure with the intent of creating jobs in rural cities and counties with an unemployment rate either equal to or above the state's average unemployment rate.

Financing is available for publicly owned infrastructure required for the construction or operation of a private development. Eligible infrastructure projects include the construction, rehabilitation, alteration, expansion, or improvement, including but not limited to, sewer and water facilities, street storm drains, bridges, railroad spurs, utility connections, wastewater treatment plants, other public facilities or other infrastructure improvements necessary for industrial or commercial activity.

The maximum loan amount available per project is $1 million, including reserves and expenses, at an interest rate equivalent to the True Interest Cost (TIC) of California General Obligation Bonds (approximately 5 percent) amortized over 20 years. Funding is available on a continuous basis.

USDA Rural Development

Rural Development is the lending arm of the U.S. Department of Agriculture. Their mission is to enhance the quality of life for all rural Americans by providing leadership in building competitive businesses and cooperatives that can prosper in the global trading marketplace.

The key financial services of their programs are:

Water and Waste Loans/Grants - construction and improvement of water, sewer, sold waste systems and storm drainage.

Business and Industrial Guaranteed Loans - up to 90 percent guarantees of a commercial loan on the purchase of land, buildings, equipment, supplies or working capital up to $25 million.

Rural Business Enterprise Grants - to facilitate development of small and emerging businesses in rural areas with revolving loan programs, technical support, working capital, equipment, real estate, infrastructure and utilities.

Intermediary Relending Program - to fund revolving loan programs that finance rural businesses up to $150,000 per ultimate recipient in communities of less than 25,000 population.

Rural Technology Development Grants - research, development and commercialization of products, processes or services using uniquely rural resources.

Rural Economic Development Loans - zero interest loans up to $750,000 for 10 years from rural utilities service borrowers to promote job creation projects.