Looking to expand your small business in Nashville? It’s high time to look into all the financing opportunities available to you. The first thing to do is to consult your accounting firm and ask about your options, including tax incentives and grants offered by the federal and state governments to small businesses.
Here’s a quick look at some of these opportunities.
Tax incentives
1. Small Business Health Insurance Premium Credit
This benefit is available to businesses with fewer than 25 FTE (full time equivalent) employees, and who paid an average of less than $56,000 per FTE in 2021. For a business to quality, they must be paying at least one-half of the insurance premiums of employees enrolled in a health plan offered by a Small Business Health Options Program Marketplace. The scheme works on a sliding scale — the fewer your employees, the higher the tax credits you may qualify for.
2. Employer Provided Childcare Facilities and Services Credit
If you have an onsite daycare center or any other qualified child care facility for use by your employees, you may be entitled to as much as $150,000 in tax credits per year.
If you employ members of disadvantaged groups, such as veterans, former incarcerated persons, and long-term food stamps recipients, you may qualify for tax credits of up to $9,600 per employee. There is no limit to the number of employees you can claim.
4. Employer Credit for Paid Family and Medical Leave
This credit is given to employers who provide paid family and medical leaves to their employees. The employer may receive credit for 12.5% to 25% of the leave wages paid after 2017.
5. Credit for Increasing Research Activities
You may receive tax credits for expenses incurred in doing “qualified research”, which the IRS defines as technological experimentation involving computer technology, engineering, biology, and other hard sciences. The expenses that may qualify include salaries, supplies, and funds paid to a third party to do the research.
Financial Grants
1. Nashville Small Business Recovery Fund
Established on February 1, 2022, the Nashville Small Business Recovery Fund aims to support small businesses in Nashville and Davidson County in their efforts to recover from the effects of the pandemic. Half of its $20 million fund will go to grants that don’t need to be paid, while the other half is earmarked for low-interest loans. Eligible businesses may apply for grants between $5,000 to $100,000, depending on their gross incomes in 2021.
2. Department of Energy grants
The Department of Energy provides grants to small businesses that invest in research and development for clean energy. Funding is administered by the DOE’s Small Business Technology Transfer (SBBT) and Small Business Innovation Research (SBIR) programs.
3. Other SBBT and SBIR programs
The federal government offers funding to small businesses who invest in scientific research and development that may be commercialized. The grants are open to for-profit businesses with a maximum of 500 employees.
Accessing one or a combination of these benefits can go a long way toward helping you generate needed funds for your expansion. Talk to your CPA to learn more about these opportunities.
Sources:
Small Business Grants: How to Get Free Money, Forbes.com
A business owner’s guide to tax credits you can get for creating jobs, providing employee benefits, and using green energy, Insider.com
