Growing a business requires more than just hard work. Business owners also need access to plenty of working capital, especially after things have really started to take off. Thankfully, there are plenty of free business incentives designed to help entrepreneurs make the most of their money. Read on to find out how to take advantage of essential programs.
Deferring and Reducing Capital Gains
Capital gains taxes can have a huge impact on business owners’ bottom lines. Investing in Opportunity Zones (OZs) can help to reduce the burden of capital gains taxes by deferring payments and allowing business owners to reinvest their money and reach their financial goals quickly. Ordinarily, investors and business owners must pay a maximum capital gains rate of 20%. Investing in OZs can reduce their tax liabilities while simultaneously fueling improvements in under-invested areas of America.
State Tax Incentives
Some states offer better tax incentives to business owners than others, but those incentives often vary based on what industry the company is operating in. Massachusetts is great for businesses that focus on the life sciences, including research, development, and manufacturing. Pennsylvania offers an exemption on Business Income and Receipts Tax for the first two years after businesses get started. Oregon prioritizes tax incentives for companies that provide dependent care assistance to employees.
New York focuses on supporting research and development facilities. Michigan offers a New Markets Tax Credit to those who work in underserved communities. Georgia offers an income tax credit to companies that hire minority contractors and subcontractors. No matter where they live, business owners should investigate local tax incentives as well as federal programs.
Concerned about decreasing financial burdens now, not spreading them out over time? Thankfully, the federal government offers a wide range of grants to support business owners in a variety of industries. The application process can seem intimidating, but with a little time, effort, and careful research, business owners of all kinds can take advantage of government grants. Check out Grants.gov to get started.
Small Business Development Centers
Unlike federal grant programs, the small business development centers (SBDCs) implemented by the U.S. Small Business Administration are locally managed, which makes them more accessible. They often draw on the expertise provided by states’ economic development agencies and partnering local universities to help entrepreneurs find out about financing opportunities, mentorships, training, and networking. In many cases, they can help business owners get access to grant money or loans that would otherwise be inaccessible.
Some organizations go out of their way to focus on offering grants to demographics that have historically been marginalized in the business world. They typically focus on helping women, minorities, and veterans returning to society who want to get businesses up and running. Entrepreneurs who fall into any of these categories would do well to look into this option.
The Bottom Line
Growing a business is hard. It requires work, funding, and smart investment strategies. Business owners who are having trouble coming up with the capital they need to grow and thrive can look into grants, while those who are already on the right track can investigate smart investment opportunities that allow them to take advantage of tax incentives. All business owners can benefit from hiring consultants more knowledgeable in these specialized fields.