Incentive Programs

All businesses, existing and new, established in Merced County are potential candidates and can take advantage of the various business incentives and tax credits available.

 

The State of California offers the following incentive programs. To learn more of the available programs, read the official incentive program description, provided by California Business Portal, here.

Financing Programs

Merced County’s Revolving Loan Fund (RLF)- The Revolving Loan Fund (RLF) is a gap financing program available to businesses located within Merced County.  Loan amounts range from $5,000-$375,000.

 

California Infrastructure and Economic Development Bank’s (IBank) Export Financing Program  The Infrastructure Bank’s Export Financing Program helps lenders provide loans to small businesses that sell goods in other countries through the Small Business Loan Guarantee Program.

 

Small Business Loan Guarantee Program – The Small Business Loan Guarantee Program provides “access to capital” that may not have been available to growing businesses without this guarantee.  This guarantee minimizes the credit risk for lenders, and makes it possible for new and existing businesses in California to qualify for small business loans.

 

California Capital Access Program – (CalCAP) and CalCAP Collateral Support – The California Capital Access Program encourages lenders to make loans to small businesses that may have difficulty obtaining capital. These credit enhancement programs minimize the credit risk for lenders, and makes it possible for new and existing businesses in California to qualify for small business loans.

 

Industrial Development Bonds  Industrial development bonds provide financing for the acquisition, construction, rehabilitation and equipping of manufacturing and processing facilities for private companies. These bonds are issued by the Infrastructure Bank, the State Treasurer’s Office, local Industrial Development Authorities, or by Joint Powers Authorities.

 

California Hub for Energy Efficiency Financing Pilot Programs – The California State Treasurer administers a set of pilot programs designed to help California achieve its energy efficiency goals by increasing the availability of lower-cost financing for energy efficiency investments throughout the state.

 

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) – The California Alternative Energy and Advanced Transportation Financing Authority works collaboratively with public and private partners to provide innovative and effective financing solutions for California’s industries, assisting in reducing the State’s greenhouse gas emissions by increasing the development and deployment of renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs.

 

U.S. Small Business Administration (SBA)(CAEATFA) – The SBA helps Americans start, build and grow businesses through a number of financial programs. While SBA itself does not make loans, it provides guarantees on loans from private and other lending institutions.

 

United States Department of Agriculture (USDA) Rural Development – The USDA provides funding opportunities for rural small businesses through loans, loan guarantees, and grants.

 

Foreign Trade Zone – The FTZ allows for foreign or domestic merchandise may enter this enclave without a formal customs entry or the payment of customs duties or government excise taxes. If the final product is exported from the United States, no U.S. customs duty or tax is levied. If, however, the final product is imported into the U.S., customs duty and excise taxes are due only at the time of transfer from the FTZ and into the U.S. Thus, zones provide opportunities to realize customs-duty savings by zone users.

Hiring & Training Programs

Expanded Subsidized Employment (ESE) (Merced County Only)- Merced’s Expanded Subsidized Employment (ESE) helps reduce the costs associated with identifying, hiring, and onboarding employees.  ESE reimburses companies up to 100% of the wages of a new hire in the first 1,040 hours of employment.

 

On-The-Job Training (OJT) (Merced Only)- On-The- Job Training (OJT) helps offset the cost of hiring and training by reimbursing employers up to 50 percent of a new hire’s hourly wage for a maximum of 1,040 training hours.

 

California Competes –  The California Competes Tax Credit is an income tax credit available to companies that want to come to California or stay and grow in California.

 

New Employment Credit – The New Employment Credit is an income tax credit available to companies that hire full-time employees within designated geographic areas.

 

Employment Training Panel – – The Employment Training Panel (ETP) provides funding to employers for training associated with upgrading the skills of their workers.

 

Work Opportunity Tax Credit (WOTC)- WOTC is a Federal Tax Credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.  The maximum tax credit ranges from $1,200 to $9,600 depending on the employees hired.

  • Unemployed Veterans
  • TANF Recipients
  • SNAP Recipients
  • Designated Community Residents
  • Vocational Rehabilitation Referred Individuals
  • Ex-Felons
  • Supplemental Security Income Recipients
  • Summer Youth Employees
  • Qualified Long-Term Unemployment Recipients

Business Expansion / Facility Improvements Programs

California Competes – The California Competes Tax Credit is an income tax credit available to companies that want to come to California or stay and grow in California.

 

New Employment Credit – The New Employment Credit is an income tax credit available to companies that hire full-time employees within designated geographic areas.

 

California Preservation Incentives – A wide variety of local, state and federal incentives are available for property owners who opt to repair and rehabilitate historical resources rather than turn to demolition and new construction. To learn more, visit the Office of Historic Preservation website.

 

California Infrastructure and Economic Development Bank (IBank) CLEEN Center – The IBank established the California Lending for Energy and Environmental Needs (CLEEN) Center to offer financing to public agencies and non-profit corporations to help achieve the State’s greenhouse gas reduction goals and increase market confidence in green investing.

 

Industrial Development Bonds – Industrial development bonds are tax exempt securities issued by the Infrastructure and Economic Development Bank (IBank), the State Treasurer’s Office, local Industrial Development Authorities, or by Joint Powers Authorities for the acquisition, construction, rehabilitation and equipping of manufacturing and processing facilities for private companies.

Start-Ups / Small Business Support Programs

Small Business Loan Guarantee Program – The Small Business Loan Guarantee Program encourages lenders to make loans to small businesses that may have difficulty obtaining capital. This guarantee minimizes the credit risk for lenders, and makes it possible for new and existing businesses in California to qualify for small business loans.

 

California Capital Access Program (CalCAP) and CalCAP Collateral Support  – The California Capital Access Program encourages lenders to make loans to small businesses that may have difficulty obtaining capital. These credit enhancement programs minimizes the credit risk for lenders, and makes it possible for new and existing businesses in California to qualify for small business loans.

 

California Competes – The California Competes Tax Credit is an income tax credit available to companies that want to come to California or stay and grow in California. 25% of the available credit is reserved for small businesses.

 

New Employment Credit – The New Employment Credit is an income tax credit available to companies that hire full-time employees within designated geographic areas.

 

Small Business Certification Program

 

Certified small business (SBs) and microbusinesses (MBs) are entitled to benefits in the state contracting process.

 

Disabled Veterans Business Enterprise Certification

 

Disabled veteran business enterprises are eligible for special benefits in the state contracting process.

Exporting Incentives Programs

California Infrastructure and Economic Development Bank’s (IBank) Export Financing Program – The IBank Program helps provide loans to small businesses that sell goods in other countries through the Small Business Loan Guarantee Program.

 

Export-Import Bank – The Export-Import Bank is the official export credit agency of the United States. Its mission is to ensure that U.S. companies — large and small — have access to the financing they need to turn export opportunities into sales.

Incentives By Industry

Advanced Manufacturing

CAEATFA Full Sales and Use Tax Exclusion  – The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a full sales and use tax exclusion for advanced manufacturers, manufacturers of alternative source and advanced transportation products, and manufacturers using recycled feedstock.

 

Manufacturing and R&D Partial Sales and Tax Exemption – Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.

 

California Infrastructure and Economic Development Bank (IBank) CLEEN Center – The IBank established the California Lending for Energy and Environmental Needs (CLEEN) Center to offer financing to public agencies and non-profit corporations to help achieve the State’s greenhouse gas reduction goals and increase market confidence in green investing.

Agricultural & Timber

Farm Equipment and Machinery Partial Sales and Use Tax Exemption – The Board of Equalization administers a partial exemption from the sales and use tax for the sale, storage, use, or other consumption of farm equipment, machinery and their parts.

 

Beginning Farmer Bonds – Beginning Farmer Bonds are used to back below-market interest rate financing for eligible agricultural land, construction/improvements, breeder livestock and equipment for qualified farmer.

 

Timber Harvesting Partial Sales and Use Tax Exemption –  The Board of Equalization administers a partial exemption from sales and use tax for sales and purchases of equipment, machinery and their parts designed primarily for off-road use in commercial timber harvesting operations.

 

United States Department of Agriculture (USDA) Rural Development – The USDA provides funding opportunities for rural small businesses through loans, loan guarantees, and grants.

Biotech & Health Care

Manufacturing and R&D Exemption – Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.

 

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA)– The California Alternative Energy and Advanced Transportation Financing Authority works collaboratively with public and private partners to provide innovative and effective financing solutions for California’s industries, assisting in reducing the State’s greenhouse gas emissions by increasing the development and deployment of renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs.

 

Energy Innovations Small Grant Program – The Energy Innovations Small Grant (EISG) Program provides grants to small businesses, non-profits, individuals and academic institutions to conduct research that establishes the feasibility of new, innovative energy concepts.

Green Business Programs

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) – The California Alternative Energy and Advanced Transportation Financing Authority works collaboratively with public and private partners to provide innovative and effective financing solutions for California’s industries, assisting in reducing the State’s greenhouse gas emissions by increasing the development and deployment of renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs.

 

Manufacturing and R&D Exemption – Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.

 

Energy Innovations Small Grant Program – The Energy Innovations Small Grant (EISG) Program provides up to $150,000 for hardware projects and $75,000 for modeling projects to small businesses, non-profits, individuals and academic institutions to conduct research that establishes the feasibility of new, innovative energy concepts.

 

California Infrastructure and Economic Development Bank (IBank) CLEEN Center – IBank established the California Lending for Energy and Environmental Needs (CLEEN) Center to offer financing that helps achieve the State’s greenhouse gas reduction goals and increase market confidence in green investing.

 

Alternative and Renewable Fuel and Vehicle Technology Program – The California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) is a competitive grant program that provides up to $100 million annually towards innovative transportation and fuel technologies that help California meet its energy, clean air, and climate-change goals.

 

CoolCalifornia – The CoolCalifornia Funding Wizard can help you find grants related to energy efficiency upgrades and rebates, with a particular emphasis on sustainable and environmentally-friendly business practices.

 

Recycling Market Development Zones – The Recycling Market Development Zone (RMDZ) program combines recycling with economic development to fuel new businesses, expand existing ones, create jobs, and divert waste from landfills. This program provides attractive loans, technical assistance, and free product marketing to businesses that use materials from the waste stream to manufacture their products and are located in a zone. The zones cover roughly 88,000 square miles of California from the Oregon border to San Diego.

Transportation

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) – The California Alternative Energy and Advanced Transportation Financing Authority works collaboratively with public and private partners to provide innovative and effective financing solutions for California’s industries, assisting in reducing the State’s greenhouse gas emissions by increasing the development and deployment of renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs.

 

Manufacturing and R&D Exemption – Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.

Film & Television

Film and Television Tax Credit – The California Film and TV Tax Credit Program provides $330 million annually to encourage film and television production in California.

 

Teleproduction Exemption –  The Board of Equalization offers a partial sales and use tax exemption for the sale, storage, use or other consumption of machinery, equipment including component parts to a qualified person used primarily in teleproduction or other postproduction service.