Financing Your Business Financial Options and Funding Sources

25 • financing Options » SBA’s Loan Guaranty Programs 26 » Commercial Loans 29 » SBA Micro Lenders 29

30 • funding Sources » Arizona’s Incentives, Programs and Grants 31 » Funding for Innovation and Technology Companies 32

While every effort has been made to ensure the reliability of the information presented in this publication, the Arizona Commerce Authority cannot guarantee the accuracy of this information due to the fact that much of the information is created by external sources. Changes/updates brought to the attention of the Arizona Commerce Authority and verified will be corrected in future editions.

3 The Access to Capital Academy presented by the Phoenix Community & Economic Development and Investment Corporation (PCDIC) – helps entrepreneurs learn how to approach potential lenders with confidence and an increased chance at securing loans.

24 AZ EE Financing Your Business Financial Options and Funding Sources 25 > oans L ons ng for ent year-to-date business financial statements statements financial business year-to-date ent ompleted loan application ompleted yi hree hree years of fiscal year-end business financial l A c T balance and statements income including statements, sheets Curr

three three years of (projections) basis. prospective business tax protect to borrower a by pledged property – Collateral returns, etc.) By putting the up of and interest the you collateral, lender. show that you are committed to the success of your business. • • • Credit Credit – have paid your debts more or less on time, no history of bankruptcy or creditor lawsuits, and have proven that you can use credit effectively. normally Lenders investigate both the history. credit past owner’s company’s and the Character – the most subjective ingredient within the formula. It encompasses the lender’s perceptions and analysis of the borrower’s reputation background and and integrity, experience, financial sophistication, and persistence. involvement Conditions – the terms of loan, including loan amount, interest rate and credit policies established financial institution. by the elax some portion of its lending criteria. A financial institution avoids making loans without collateral. With an SBA loan, financial institution may r App will need: financing seeking Businesses Opti ng ng y (financial statements, ci one M . You can sign up . for automatic updates, You ng wi nan

Capacity Capacity – the customer’s ability to repay based on the the business’ cash flow. loan Capacity should be demonstrated on a historical

orro Generally, there are no grants to individuals to start or expand a small business. The The best source www.grants.gov for federal and the site also includes useful grant information regarding programs process. submission grants is the federal AZ EE A common loan criteria is known as the Five C’s: Capacity, Capacity, C’s: Five the as known is criteria loan common A and Conditions: Credit, Character Collateral, B Lenders are not and basic conservative guidelinesthey have Consequently, in the financing. for business of taking risks. The The most common source of funding, banks, and credit union will provide a loan if you can show a sound business proposal. The The primary source of capital for most new come businesses from personal savings and other forms of personal resources such as friends and family, when starting out. While credit cards often are used needs, to there finance may business be better options available, very even small loans. for Often, money is loaned interest-free or which can be beneficial. rate a low at There There are several sources to consider when looking for financing. It is important explore to a decision. making before all of options your Fi 26 Financing Your Business Financial Options and Funding Sources

risk. credit good a are you that lender your convince to able why you need and it, how you will pay it Youback. must be need, you money much how exactlyorganized.Know and prepared be must you loan, a obtaining successful Tobe L App oan Pro your loan proposal. loan your te iaca wrset wl hl yu rpr for prepare you help will worksheets financial the – Review the Business Planning section in Chapter 1 1 Chapter in section Planning Business the Review • • • •

A businessdeb M T owning 20percent ormore of thebusiness Curr wo years of personal income verification l anagement resumes yi ent personal financial statements from anyone from statements financial personal ent ng for p osal t schedule L oans (continued) Be prepared to fullydiscussthe next page for it’s loanguaranty programs. the See programs. loan of variety wide a offers SBA The SBA developing business plans. business developing for organizations that provide technical support in in support technical provide that organizations for See Chapter 2, Business Assistance and Counseling, Counseling, and Assistance Business 2, Chapter See make it “yes” tomorrow! “yes” it make declined – declined little or no collateral. Ask the lender why your loan was range from a poorly conceived business idea to having a lender will decline a business loan request. They may why reasons many are There declined? is loan a Why • • • • • • •

paid ifyour businessfails. be will loan the how lenders the shows clearly plan your lender. for information valuable provide will plan business detailed Your projections. cash-flow include must Information loan. the repay to able be will company your businessandallowners orofficers. of records bythe financial discuss to be reviewed prepared Be lender. will officer or owner each of P to beagood creditandhow risk, thisloanwillhelp. explain why your company has been, and will continue Wh expand thebusiness. new equipment; followingsofthe areforone reasons: a detailed outline of the use of loan funds. Most loans H project. the in investment personal significant a have owners business the that lender the assures This required. funds the of 50-percent to up provide to expected Owner total fundsneeded.Bespecific. Siz A P ’s ersonal Credit Record – lal dmntae o your how demonstrate Clearly – Plan ayback The alternative payback alternative The – Plan Paybacklternative ow Funds Are to Be Used – Be prepared to provide e rprd o lal ietf the identify clearly to prepared Be – Loan of e Briefly – Risk Credit Good a Youris Companyy L oan – In most cases, the owner(s) will be will owner(s) the cases, most In – Equity Remember, if it’s “no” today, learn how to to how learn today, “no” it’s if Remember, G (b) to pay off existing debts; or uaran The personal credit record ty Programs to purchaseto (a) to to (c) AZ EE Financing Your Business Financial Options and Funding Sources 27 Business able to obtain obtain to able Business which financing not otherwise would due to be provided equity, collateral, term, in time and/or business. Fixed balloons; No maturity; prepayment No penalty if maturity under 15 years. or re-affirm Establish businessrelationship with a lender. Same as Standard 7(a) plus long-term for fixed financing produce to used assets or services products export. for 7(a) Same as Standard working plus provides capital American to perform to Exporters transactions on export export finance and/or Ability receivables. Standby Financing to for Credit of Letters purposes. export 7(a) Same as Standard revolving plus provides capital not working otherwise available on an perform to to assignable contract, needs, seasonal cover build or renovate to or personal and space, commercial obtain funds against to assets. current existing to structured Also business needs. meet 7(a) Same as Standard plus streamlined Easy-to-use process; and credit line of a revolving for allows which feature 7(a) does Standard not. application. Stream-lined Stream-lined application. continued on next page > Who Qualifies Benefit to Borrowers oan Programs oan Must be for-profit and and for-profit be Must size SBA meet good show standards; credit, character, and management, must repay; ability to type of be an eligible business, use eligible for proceeds and purpose, that demonstrate otherwise is not credit available. Same as Standard 7(a) plus businesses or be engaged must engage to preparing trade in international affected or adversely from competition by imports. 7(a) Same as Standard in been have must plus at business for and one year least engage to preparing in or increase trade. international 7(a) Same as Standard plus a business that needs the specialized this program proceeds offers. Same as Standard 7(a). markets.Underserved Stream-lined Rural and small Rural markets community impacted by high loss, population unemployment. L

tandard tandard on on Structure ** ti m Term loan with one Term of payment principal and (P&I) interest month. each variable Interest as or fixed with negotiated be Cannot lender. SBA revolving. Guaranty a charges Fee. Same as Standard 7(a). Maximum guaranty SBA for amount capital is working $4 million. Short term revolving credit line of based on base or borrowing purchase export Monthly orders. payments; interest principal basedpayments on collection of receivables. foreign line of Revolving with credit interest monthly and principal based payments on when the business receives doing the cash for the activity the loan proceeds financed. Same as Standard lender 7(a) except leeway has more structure to under repayment rules. their own Same as Standard 7(a). Same as S 7(a). a ra gr t o s i Pr Maximum Interest Rate n SBA sets a sets SBA rate maximum both for variable and fixed-rates loans (discuss with lender or local SBA OfficeDistrict current for information). Same as 7(a). Standard by Established SBA No lender. established maximums. 7(a). Standard $50,000 Loans or less: + 6.5%. Prime over Loans $50,000: + 4.5%. Prime up to Loans $150,000: 85% above Loans $150,000: 75% up to Loans $150,000: 85% above Loans $150,000: 75% i oan L dm (a) A 7 Maturity Depends on use Depends proceeds of and ability to Generally repay. capital working and machinery & loans equipment 5-10 years; have is up estate real Term 25 years. to with negotiated lender. Same as Standard term 7(a) for loans. Revolving up credit lines of 7 years. to 7(a). Standard 7(a). Standard Same as 7(a). Standard one Generally but can be year, to 3 years up to a single match cycle. transaction 10 years. to Up Same as

ness ness i us Use of Proceeds B The 7(a) Guaranty Fee Reference Chart (on next page) explains the Agency’s guaranty fee charges. The 7(a) Guaranty Fee Reference Chart (on next page) explains the Agency’s (discuss with(discuss lender). Expansion/renovation; construction, new land or purchase purchase buildings; equipment, fixtures, lease-hold working improvements; capital; inventory, business acquisition, refinancing and startups under certain conditions Acquire, renovate, Acquire, or facilities modernize used in equipment or products making be exported, to services workingplus permanent capital and refinance structured not debt terms. with reasonable working Short-term, exporters. capital for Can be single or revolving. transaction of Letters Standby export for Credit purposes. seasonal Finances: capital needs, working perform to cost direct assignable contracts, of costs construction resale, for structure against or advances and inventory existing receivables. be used 7(a) or may working a revolving for credit.capital line of The lender can pass this expense to the borrower and loan proceeds can be used to reimburse the lender. All SBA programs and services are provided on a nondiscriminatory basis. on a nondiscriminatory provided are services and programs SBA All Amount Maximum Maximum ** The SBA charges the lender a guaranty fee based on the loan’s maturity and the dollar amount which is initially guaranteed. ** The SBA charges the lender a guaranty fee based on the loan’s $5 million any to one business, including affiliates. $350,000. Same as a Standard $250,000. 7(a). Same as Standard Same as $350,000. 7(a). Same as Standard Same as Same as Standard 7(a). Same as Standard 7(a). Same as Standard 7(a). mall mall S : . (a) S

. Program U Applicant applies Applicant business loan for Lender lender; to for SBA applies to their of guaranty loan if proposed it determine they Loan is necessary. not lender, from SBA. International International term Long Trade: to help financing businesses in engaged or exporting adversely impacted by imports. Export Working Capital Program: transaction Single or Revolving Capital Working for credit lines of exporters. Four CAPLines: Revolving different Credit, Lines of Seasonal, a/k/a Builders, Contract Capital. Working SBAExpress: approves Lender the loan. Small Loan Advantage: loans lower-dollar under-served to areas. Loan Rural Rural- Advantage: based or small lender. community Standard 7 Standard AZ EE 28 Financing Your Business Financial Options and Funding Sources

with high needs. located inareas businesses Lenders assisting Alternative Advantage: Community the loan. Lender approves Patriot Express: the loan. Lender approves Export Express: Micro-Loans three sources. provided from Project Financing Fixed Asset 504 Loans: wouldbe,3.5%of $1,000,000($35,000)PLUS3.75%ofNOTE 2:Theguaranty feeona$2,000,000loanwith75% guaranty($1.5millionguaranteed portion) NOTE 1:Theguarantyfeeona$100,000 loanwithan85%guarantywouldbe2%of$85,000or$1,700,which thelenderwouldretain$425. U 7 Fee (a) Program . S $500,000

R G Ch . e u f a ere a S r r t ($18,750), foratotalof$53,750. mall anty nc 2000 SameasStandard 7(a) $250,000. Sameas $500,000. SameasSBA Express $500,000. borrower. business one small total to $50,000 million. up to $5.0 portion SBA Maximum Amount e All SBA programs andservices are provided onanondiscriminatory basis. intermediary loan. Lenders using theirSBA loans by SBA Micro- Dept. of Agriculture or by orguaranteed by the to refinance loansmade except cannot beused Standard 7(a). allowed. refinance isnot purposes. Debt of Credit for export for Standby Letters plus canbeused working capital. and equipment, supplies, inventory, Furniture, fixtures, limited basis. working ona capital conditions,certain and fixed-asset debt under refinancing long-term long-term fixed-assets, For theacquisition of Short TermShort Loans –upto $5million...... 0.25%of theguaranteed...... Maturities portion of 12months orless 3.75%of theguaranteed over portion $1,000,000 $700,001 to $5,000,000 $150,001 to $700,000...... 3%of guaranteed...... Maturities portion that exceed 12months Loans of $150,000orless(See Note 1).... 2% of guaranteed Lender portion, isauthorized to retain....Maturities that exceed 12months Gross Size of Loan Fees Notes B Use ofProceeds us i ness 7(a) (See Note 2)...... 3.5% of guaranteed up portion to $1,000,000 PLUS...... Maturities that exceed 12 months Standard 7(a). Same as Standard 7(a). Same as SBA Express. Same as exceed 6years. possible, not to Shortest term portion. the SBA/CDC year term on Either 10or20 L Maturity oan A N dm on Pr 7 i o base rate. 4% over the “Spread” is+ allowable except Standard 7(a) Same as Standard 7(a). Same as SBA Express. Same as them. then checkwith lenders and intermediary locally available for locations of District Office local SBA Check with information. for current District Office local SBA Check with n (a) Interest Rate gr Maximum i

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d e u n i t n o c business. to aneligible small propose to make on loanthey for 7(a)guaranty markets to apply in underserved development economic focused on oriented lenders Allows mission- SBA Express. Same as SBA Express. Same as provided. assistance also technical organizations; non-profit lending Loans through 3. Applicant. 2. Third Party 1. The CDC Financing from Lenders. Company. Development Certified ti Structure on L underserved market . be located inan business should 7(a) loans,butthe same asfor Standard requirements are Loan eligibility disability. service-connected during service orof or veteran whodied of service member or widowed spouse any of thesegroups, member orspouseof or National Guard military, reservist veteran, active-duty 51% total ownership: equaling at least the following groups by oneormore of owned andcontrolled 7(a) plusmust be Same asStandard activity. export development used to support proceeds must be Express plusloan Same asSBA businesses. non-profit day care loans canbemadeto Same as7(a)plus past 2years. over $5millionfor the average net income and donot have an tangible net worth $15.0 millionin that donot exceed For-profit businesses oan Programs h ulfe BenefittoBorrowers Who Qualifies qualified businesses. make more loansto encourage themto guaranty whichcan percentage of with ahigher plus provides lenders Same asSBA Express lender. are assessedby the needs of theapplicant technical assistance SBA guaranty andthe financing needsan financing iftheir who canprovide them the typesof lenders get more choices on underserved markets Borrowers in authorized. Credit are also Standby Letters of of smallbusinesses. development activities loans to finance export- them to make more which canencourage percentage guaranty with ahigher plus provides lenders Same asSBA Express available. Technical assistance small loanamounts; financing; Very lenders; Fixed-rate intermediary non-profit Direct loansfrom balloons. full amortization;no low down payment; long-term fixed rate; Fees under3percent; AZ EE

Financing Your Business Financial Options and Funding Sources 29

e c with (CPLC) an es t s ic i ss enders: enders: erv L A S al al ro ro ic ci enders L n

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ro ch nan The The USDA variety Rural of assistance Development communities. to Several rural delivers businesses of rural and a the small businesses programs ranchers) directly. To view (including Arizona’s Business assist and farmers and Cooperative Programs, visit . USDA’s website www.rurdev.usda.gov/rbs/busp/bpdir.htm at CCION New Mexico, Arizona, Colorado Arizona, Mexico, New CCION A Mic 520-682-3648 www.accionnm.org and Tucson Phoenix Coverage: Area Corporation Development Economic Neighborhood (NEDCO) 480-258-6927 www.nedco-mesa.org Valley and Phoenix-East Phoenix Coverage: Area Te AZ 85034 270, Phoenix, Suite Road, 1024 E. Buckeye 602-258-9911 www.prestamosloanfund.org Arizona of All Coverage: Area SBA Fi small provide loans Microloan from programs less ranging SBA the program, this part of As $50,000. to up $500 than makes funds available to non-profitintermediaries that, in turn, make the small loans directly to entrepreneurs. may be typical used business for Proceeds purposes such as machinery, fixtures, furniture, capital,of purchase working Microloans supplies, may inventory. equipment and/or not be used for the purchase of real rates estate. are Interest and the intermediary. the borrower between negotiated Corp Development & Housing PPEP Microbusiness (PMHDC) 802 E. 46th Street, Tucson, AZ 85713 802 E. Tucson, Street, 46th 520-889-4203; 800-293-2974 www.pmhdc.net/loans.html Area Coverage: Cochise, Pima, Pinal, Santa Cruz, Yuma, Nation Navajo and the counties Maricopa rural CDFI, LLC, Prestamos Inc. La Causa Por Chicanos a subsidiary of

www. ona iz r A . www.sbaguides.com n i oans L ed t a c al al o L ES ci C , www.sba.gov/content/arizona-lender-list . http://app1.sba.gov/training/sbafp enders L

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select “Arizona SBA Lender List.” Lender SBA select “Arizona listing, listing, and other small business financial programs. For a For programs. financial business small other and are are authorized to handle SBA guaranteed loans specialize specialize in business loans. Many of these lenders unions, and small business lending companies that SBA There are many conventional banks, credit ree ree clinics on how to prepare a SBA loan application and approach a at website SBA the visit schedules, For approval. lender to improve chances for The Small Business information Resource on financing magazine options provides to start at online viewed be can and business or grow a SBA F Finance Primer: A Guide to Programs SBA’s Loan Guaranty or call 602-745-7200. sba.gov/az AZ EE A variety of loan arrangements finance companies, are insurance available companies through and mortgage bankers. Review lender ratings on New.” the , under “What’s SBA www.sba.gov/az website at A loan officer fromyour bank can discuss which typeof loan will best meet your needs, outline the and procedures. application Commer through financing credit seek businesses many Arizona, In a commercial bank. business Commercial community with a banks variety of financing provide options such the as SBA guaranteed loans, commercial installment credit. of letters loans, and 30 Financing Your Business Financial Options and Funding Sources

creativity requires andresourcefulness. Someoptions include: venture a new financing Sometimes products. that learn to new or ideas in moneyinvestorsinvestprofessional don’t disappointed are entrepreneurs Often, fundingcapital resources. alternative and traditional approaching before consider to factors important are However, there venture. new a finance and start to necessary is that all is productnew or patent, idea, an having that believe entrepreneurs Many F • • • • •

f auatrn, aktn ad itiuin in distribution and exchange for thepayment of royalties marketing manufacturing, of Lic versus using abankloan L notes inlieuof cashpayments Supplier to getting funded development, prior assistance management product and goods, suppliers, services, for exchange in E and friends, home equityloans and family from money cards, credit P und curn eupet hog leasing through equipment acquiring – easing nldn proa funds, personal including – Resources ersonal rdn eut i te company the in equity trading – Barter quity etn aohr opn icr h cost the incur company another letting – ensing negotiating terms or signing promissory signing or terms negotiating – s i ng S our • • • •

i adto t dmnig od rdt n other and credit safeguards) good demanding to collateral addition as take (in can they that equity) home and assets personal and business substantial are there unless startups, to loans making from away stay usually and business capital venture the in not are lenders, SBA purchase collateral) as orders (taking accounts receivables, customer contracts and rates interest higher charging while banks, more than take risk and company new a with work will that N T development benefit the for immediate community or boost economic capital raise will project the if especially relocation, or expansion businesses operate help may that agencies programs private and government Special their own market) for or internally product the needs that company a bills the pay S omril ak, including banks, commercial – Lenders raditional convincing another company to company another convincing – Partnerstrategic te tps f lenders of types other – Lenderson-Traditional (real estate, equipment, marketable securitiesmarketable equipment, estate, (real hmes f omre n some and commerce of chambers – Funds (maybe the company’s first customer or customer company’sfirst the (maybe c es AZ EE Financing Your Business Financial Options and Funding Sources 31

t men t (SBIC), visit the tment) s al Inves ves, Programs Programs ves, pit . (ACA) are Angel investors nve I ti

l en http://archive.sba.gov/aboutsba/ al c pit s t ness Ca ness (Ange i it us ran B G ure Ca ona’s In ona’s t iz r en mall mall Venture Venture capital firmsprovide equity financingbusinesses. This to small equity position usually ranges from 10- percent to 40-percent. Most venture capitalists indicate they are interested in proposals requiring an investment $1.5 million. $250,000 to of in the area Venture capital financing is not commonly available for startup businesses. Inquiries should be made directly to the venture capital firms.For the Arizona listof licensed Small Business Investment Companies SBA . website sbaprograms/inv/INV_DIRECTORY_SBIC.html at A Arizona is committed to helping businesses succeed. The incentives, programs and grants state’s that are administered by the Arizona Commerce Authority are following page. For more listed details, visit the website at ACA on the select “Incentives.” www.azcommerce.com S Arizona’s Small Business Capital Investment Tax Credit makes $20 million available in tax credits to “investors” that make an investment in a company certified by Arizona Commerce Authority the V Tax Cred Tax traditionally high net-worth individuals that are investing up to $250,000 into companies with products and ideas level. a personal at resonate may that This Arizona tax credit businesses will in attracting assist the early expand operations much-needed stage and bring capital small new ideas, to services products to and market. An investor may receive an Arizona income tax credit up to 30% or 35% of amount, the investment depending on For more company. the information, visit the website ACA at type or select “Incentives.” www.azcommerce.com location of the and

(ATIF) newsletter, sign up sign up newsletter,

(BLA) ES C SOUR

NG I ona Angels Investor Network Network Investor ona Angels

In In addition to the innovation ACA’s website, newsletter it’s provides weekly information as new new programs and financial resources this receive weekly To available. become . on www.azcommerce.com Southwest Business Financing Corporation Corporation Financing Business Southwest 602-495-6495 Phoenix: 520-297-3232 Tucson: www.swbfc.com Invest Southwest Southwest Invest 480-788-5038 www.investsouthwest.org Export-Import Bank of the United States States the United Bank of Export-Import 800-565-3946 www.exim.gov Desert Angels Angels Desert 520-490-8137 www.desertangels.org Community Investment Corporation Corporation Investment Community 520-529-1766 www.communityinvestmentcorporation.org City of Phoenix Phoenix of City Department Development Economic and Community 602-262-5040 www.phoenix.gov/econdev 602-256-3112 www.phoenixnewmarkets.org/loan-programs/ business-loan-alliance-program Business Loan Alliance Alliance Loan Business Business Development Finance Corporation Corporation Finance Development Business 602-381-6292; 800-264-3377 Phoenix: 520-623-3377; 866-630-1974 Tucson: www.bdfc.com 480-965-6049 http://atif.asu.edu Arizona Technology Investor Forum Forum Investor Technology Arizona Arizona MultiBank Community Development Development Community MultiBank Arizona Corporation 602-643-0030 www.multibank.org 602-616-7833 602-616-7833 www.arizonaangels.com FUND Ariz AZ EE 32 Financing Your Business Financial Options and Funding Sources

A Investment Tax Credit Small Business Capital Program Research &Development Incentives Renewable Energy Tax Credit Q Q Conservation Bonds Q Private Activity Bonds ReuseMilitary Job Training Program Incentives Healthy Forest Tax Private Activity Bonds Solar Energy Program Commercial &Industrial Arizona STEP Grant Challenge Arizona Innovation Program Accelerator Fund Arizona Innovation Arizona FAST Grant Arizona Competes Fund (Angel Investment) (Angel C ualified Facilities Tax uality Jobs Program ualified Energy A ’s In c Z en one s ti ve Tool • Up to 75%of theexcess credit tax canberefunded to smallbusinesses -34%of expenses ifmadeinconjunctionwithanAZ publicuniversity -$600,000plus15%ontheexpenses inexcess of $2.5million -24%of increased R&D expenses • Tax credit upto • • Refundable credit tax upto 10%of thecompany’s investment • Refundable credit tax upto 10%of thecompany’s investment or$20,000pernew job, • Tax credit upto$9,000 pernew net qualifiedemployee over a3 year period • • • Alternative financing mechanism • • Alternative financing mechanism -Incumbent jobs upto 50%of eligible training expenses canbereimbursed -New jobs upto 75% of eligible training expenses canbereimbursed • Cashassistance upto $1.5Mperbusiness • • Tax credits of upto $10,000for each new employee • • • • • • • Use rate fueltax of 9¢pergallon -Not to exceed $50,000pertaxpayer peryear -Up to $25,000perlocation peryear • Tax credit equalto 10%of theinstalled cost of thesolarenergy device • • • Cashassistance to helpdevelop international export opportunities • • Cashassistance for promising technology ventures • • • Loan participation program to spurbusinessexpansion andjobcreation • Grant upto $7,500to provide professional select consulting services • Cashassistance to initiate thetechnology commercialization process • Assistance willbeperformance-based andmust result inanet benefit to the state • Cashassistance for businessattraction projects that stimulate andpromote industries • • Tax credit upto 35%of investment amount over 3years

P whichever isless Cr Q I contracts T P W P U T T U R Gr P L that provide stable, high-wage jobs companies E nterest onbondsisexempt from federal incomefor tax most bondholders ransaction Privilege Tax Exemption typesof oncertain construction ransaction Privilege Tax Exemption onconstruction contracts ransaction Privilege Tax Exemption equipment onqualifying purchase orlease oans from $50,000-$2millionfor upto 49.9%of afinancing package eimbursable grants upto $10,000 limination of gainsonincome capital tax derived from investment incertified roperty reductions tax of upto 75%for upto five years rinciple andinterest payments may bedeferred for upto 24months roperty reductions tax of upto 75% for upto fifteen years roperty reductions tax of upto 75%for upto five years se Tax Exemption equipment onqualifying purchased out-of-state p tocredit $3,000tax for each net new jobcreated tax creditualified tax bond orkforce training credit tax upto $9,000for each net new jobcreated edit rate is70%of thecredit rate that would allow thebondto sellat par ants range from $100,000-$250,000 B ox AZ EE Financing Your Business Financial Options and Funding Sources 33

. Fast the rogram P es es i an p raining T (SBIR) and the Small Business funding programs, visit funding programs, (STTR) rogram P Com . www.sba.gov/about-sba-services/7050 y roposal rant G Playbook is an Arizona Commerce Authority III a F Playbook is partially funded by the SBA. SBA’s nolog Z SBA website at at website SBA To To learn more Innovation about Research both the Transfer Technology Small Business III he Arizona Commerce Authority launched the AZ he P A T ST structured structured program of training and technical assistance enabling high-growth potential small technology firms to compete Phase more SBIR/STTR for federal I effectively and II awards innovations in Phase III. For more details and and application, visit ultimately www.azcommerce.com/sbirsttr-proposal-training-program commercialize their P funding is not an endorsement of any products, opinions opinions products, any of endorsement an not is funding or services. All SBA funded programs are extended to basis.the public on a nondiscriminatory T Grant Program in December 2011. This competitive grant grant competitive This 2011. December in Program Grant program provides seed process. commercialization the initiate help to companies money to technology-based Companies with fewer than 30 employees and revenues less than $2 million may qualify to receive up to $7,500 for professional consulting services to help bring completion. their of stage the next to product This grant throughout program the will requirements year. be and A . offered www.azcommerce.com/az-fast-grant grant full periodically application description is of P SBIR/STTR online the at ch

(ACA) und

t F or on and Te and on . p x ti E (renewable energy allenge h . Companies receiving celerator c on C A ti P) Program E T e Trade and S t a St on ( nnovation ti I ng for Innova for ng i ona Innova ona ona

iz iz z r r awards awards will be technology required to and commercialize year. generate their For more revenue information, www.azinnovationchallenge.com. visit within the one website at A The The Arizona Innovation Challenge advances innovation and technology in commercialization Arizona opportunities by supporting Arizona’s early stage targeted ventures industries in and sustainability, bio and life sciences, electronics, information technologies, aerospace and defense and advanced manufacturing) STEP is partially funded by the SBA. SBA’s funding A The STEP businesses enter program export markets will for or the to first assist expand time into new see Arizona markets. For Chapter more small details, 7 www.azcommerce.com/az-step-grant and visit the ACA website at Promo is not an endorsement of any products, opinions or services. All SBA funded programs are extended to the public on a nondiscriminatory basis. ri und n 2011, the Arizona Commerce Authority AZ EE I F A The The ACA will target industries including renewable Financing Financing packages may capital, working for used be to are range proceeds Loan million. from $50,000 to inventory, $2 equipment purchase, improvements. and real property was was awarded $18.2 million from the of U.S. Treasury’s Small Department Business Credit Arizona Initiative for Innovation the Accelerator loan Fund participation program helps spur financing to program. small This businesses and manufacturers, in private finance collaboration partners, with foster to business in the state. and job creation expansion energy and electronics, sustainability, information bio technology, defense, and and aerospace advanced manufacturing. ACA’s , website, life and www.azcommerce.com/arizona-innovation-accelerator-fund sciences, provides more detailed information and an application this program. for form