Illinois Business Development Programs: Financing programs provided through the Illinois Department of Commerce and Economic Opportunity's Business Development Finance Division

Global Finance, Dec 2004 by Green, Paula L

Population: 12.6 million

Illinois Department of Commerce and Economic Opportunity

100 W Randolph, Suite 3-400

Chicago, IL 60601

Phone: 312-814-2811

Fax: 312-814-3032

www.commerce.state.il.us

Contact: Bob Westover, deputy director of business development

Phone: 217-785-6193

Email: Robert_Westover@commerce.state.il.us

Illinois Bankers Association

133 S. 4th St., Suite 300

Springfield, IL 62701

Phone: 217-789-9340

Fax: 217-789-5410

www.ilbanker.com

The Illinois Development Council

1224 Centre West Drive, Suite 400B

Springfield, IL 62704

Phone: 217-698-7067

Fax: 217-793-0041

www.ildevelopmentcouncil.org

Contact: Pam Toison, executive director

Email: pam@ildevelopmentcouncil.org

Top Banking Institutions

Bank One

LaSalle Bank

Northern Trust

PARTICIPATION LOAN PROGRAM

The program works through banks and other conventional lenders to provide subordinated financial assistance to small businesses that will employ Illinois workers. The state will participate in loans up to 25% of the total amount of a project, but not less than $10,000 nor more than $750,000. The participation amount is limited to approximately $10,000 per job projected to be created/retained, and a need-for-assistance test is applied.

CAPITAL ACCESS PROGRAM (CAP)

The Capital Access Program is designed to encourage financial institutions to make loans to new and small businesses that do not qualify for conventional financing. A reserve fund is established at the lending bank and is available to draw upon should any of the bank's CAP loans default. Loans enrolled in this program are limited to a maximum amount of $100,000.

BUSINESS DEVELOPMENT PUBLIC INFRASTRUCTURE PROGRAM

The Business Development Public Infrastructure Program provides low-interest financing to units of local government for public improvements on behalf of businesses undertaking expansion or relocation projects that meet the program criteria and demonstrate great potential for creating and retaining jobs. The infrastructure improvements must be made on public property and must directly result in the creation or retention of private-sector jobs. The local government must demonstrate clear need for the financial assistance to undertake the improvements.

COMMUNITY DEVELOPMENT ASSISTANCE PROGRAM (CDAP)

CDAP is a federally funded program that assists smaller Illinois local governments in financing public facilities, housing rehabilitation projects or economic development needs. Grants are made to units of local government and may be loaned to businesses for projects that will create or retain jobs in the community. Grant funds may also be used by the local government for improvements to public infrastructure that directly support economic development. The program is limited to communities with populations under 50,000 that are not located within one of the eight large urban counties that receive funds directly from the federal government. Funds are targeted toward projects that primarily benefit low- and moderate-income people.

LARGE BUSINESS DEVELOPMENT PROGRAM

The Illinois Large Business Development Program (LBDP) provides incentive financing to encourage large out-of-state companies to locate in Illinois or existing large companies to undertake substantial job expansion or retention projects. Funds available through the program can be used by large businesses (500 or more employees) for typical business activities, including financing the purchase of land and buildings, construction or renovation of fixed assets, site preparation and purchase of machinery and equipment. LBDP funds are targeted to extraordinary economic development opportunities-that is, projects that will result in substantial private investment and the creation and/or retention of 300 or more jobs.

EMPLOYER TRAINING INVESTMENT PROGRAM/LARGE COMPANY COMPONENT (ETIP/LCC)

This state-funded program assists Illinois companies with 250 or more employees in training new workers or upgrading the skills of their existing workers. ETIP/LCC grants may be awarded to individual companies, multi-company efforts and intermediary organizations offering multi-company training.

EMPLOYER TRAINING INVESTMENT PROGRAM/SMALL/MID-SIZE COMPANY COMPONENT (ETIP/SMCC)

Same as above except for companies with 249 or fewer employees.

ILLINOIS EDGE (ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY)

EDGE provides tax credits to qualifying businesses that create or retain jobs and make capital investments in Illinois. Credits are calculated from the personal income tax collected on salaries paid to employees in the new or retained jobs, which may be taken as a non-refundable tax credit against corporate income taxes over a period not to exceed 10 taxable years. To qualify, firms with 100 or more employees must make an investment of at least $5 million in capital improvement and create a minimum of 25 new full-time jobs, although demonstrated public benefit may result in a waiver of these requirements. For firms with 100 or fewer employees, a capital investments of $1 million must be made and the creation of at least five new jobs must occur.