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Alabama Small Business Grants

If you have a small business idea and want to give it a shape by establishing a startup in Alabama then one of the cornerstone of your business plan is finances. Every form of business whether small or big requires an initial investment to get it started. The initial expenses may be lower or higher depending on specific requirements that vary from business registration to hiring of employees and overhead or utility costs. This is where Alabama small business grants can be quite useful or beneficial. Hence, we have created this article to provide first time business owners and entrepreneurs with information regarding the different types of finances available including Alabama grants for small business, loans and business incentives.

Doing Business in Alabama

Doing business in Alabama is considered favorable by entrepreneurs and new business owners due to the pro-business environment the state offers. The state also has a strong economy with the real gross domestic product (GDP) in excess of $200 billion. The state boasts of a strong transportation and logistics infrastructure that supports business growth. One of the salient highlights are the business incentive programs as well as Alabama small business grants programs that strive to provide startups with the much needed financial assistance. These are some of the reasons why the state is home to several growing companies like Vulcan Materials Company (Fortune 500), Buffalo Rock Company, Chester’s International, Hibbett Sports, Spire Alabama – Spire Energy, and Regions Financial Corporation (Fortune 500) among others. Some of the cities in Alabama are considered to be extremely business friendly like Birmingham, Millbrook, and Mobile.

Why is Alabama a good place to do business?

The state of Alabama is famous for policies and regulations that favor businesses, which is a good thing for small companies and startups. This along with availability of a skilled workforce makes doing business in Alabama highly fruitful and growth oriented. As a new company, access to Alabama small business incentives can provide numerous benefits including tax savings. Let us take a look at some of the advantages of conducting business in this state.

  • Economic Growth and Development – Alabama is one of the few states in the nation that has been witnessing a positive economic growth and development in the last decade. The state has seen record employment levels as well as high growth in export of “Made in Alabama” goods, making doing business in Alabama really profitable. The state has generated commitments for projects amounting to $10.1 billion in new capital investment with Baldwin County leading the table with $2.5 billion in new investments. One of the top companies in the automobile industry is Hyundai and they announced a $300 million investment project. The leading industry in terms of capital investment is Aerospace / Aviation / Defense followed by Agricultural/Food Production and Automotive.
  • Business Climate – One of the most defining factors for startups is the overall business environment of the state. Alabama has a pro-business environment, which is driven by several key industries and elements. These are:
    • Top cities like Millbrook, Prattville, Daphne, Cullman, and Montgomery with high economic vitality, low tax burden, and robust transportation infrastructure
    • The overall tax burden in Alabama is considered to be one of the lowest in the nation
    • Access to several Alabama small business incentives and grants
    • Deep transportation network that includes 6 Interstates, 9th largest deep-water seaport in the USA, 90 public & 5 cargo airports, and 4 Class-1 Railroads among others.
    • The state is home to five foreign trade zones
    • Alabama is home to 29 colleges and universities that help businesses to find talented and skilled personnel
    • Low cost of living as compared to other states and is 13% lower than the national average
  • Thriving Startup Ecosystem – Apart from Alabama grants for small business; the state offers several other advantages to entrepreneurs like a thriving startup ecosystem. The state has always been famous for innovation and acceleration and hence, the Economic Development Partnership of Alabama (EDPA). EDPA has invested heavily in the startup scene of Alabama. The ecosystem is replete with everything right from active early-stage investors to access to networking and digital resources for promoting entrepreneurship.

Start a new business in Alabama and Enjoy State Benefits!

Small Business Grants & Incentives in Alabama

When you form a new business in Alabama, you will have access to a wide variety of Alabama small business grants and incentive programs. These programs have been created to provide necessary support and assistance to small and medium sized enterprises (SME’s) in building their operations in the state. Here is a list of some of the most popular incentive and grants programs in Alabama.

The Alabama Small Business Development Center Network

The Alabama Small Business Development Center Network began its operations in 1980 and has several programs revolving around providing Alabama small business grants to new or existing startups. They have over 700 grant programs and one of their popular programs is the NASE grants where an eligible business can benefit from a grant of up to $4,000. This grant can be used for different business activities like purchasing hiring help, new equipment, and creation of marketing or promotional material.

Innovate Alabama Supplemental Grant

One of the highly popular Alabama grants for a small business is known as the Innovate Alabama supplemental grant program. The primary objective of this program is to provide additional resources to small businesses in the state. This is especially valid for those businesses that are already active in the Phase I or Phase II of the Small Business Technology Transfer (STTR) grant or the Federal Small Business Innovation Research (SBIR). Innovate Alabama has till date awarded grant funding of more than $9.6 million. This grant fund can be used by businesses to enable product testing, market research, intellectual property protection and for technical work among others.

Amber Grants

Amber Grants program is a popular program initiated by the WomensNet and was first started in 1998. This type of Alabama grant for a small business is awarded to women entrepreneurs every month. The grant amount is $10,000 and there is also the possibility of receiving an additional grant fund of $25,000 annually. So, if you are a women entrepreneur searching for Alabama small business grants then applying for the Amber Grant can be quite beneficial.

Alabama Jobs Act

A grant is not always available as there is a specific time for applying for certain grants. In such a scenario, Alabama small business incentives can be quite useful. There are different types of incentives available in the state although the Job-creation tax credit and the Investment tax credits are one of the most beneficial. The Alabama Jobs Act is an incentives platform that offers these credits to eligible businesses. The investment credit is a discretionary credit program where you can get a maximum credit annually of 1.5% on qualified capital investment. This credit can be utilized against income tax including estimated tax, insurance premiums tax, and utility license tax among others.

The job creation tax credit is also a discretionary program where eligible companies or those doing business in Alabama will be able to receive an annual cash refund on the gross payroll of the previous year. The credit available is up to 3% for new eligible employees. You can even receive a cash refund of 4% if your business matches any of the following:

  • It is located in targeted counties
  • The entity falls in the category of underrepresented companies
  • It is a technology company
  • It is a company engaged in various sectors like biomedical, pharmaceutical, medical supplies, medical technology and related R&D among others.

Tax Abatements

Different states have different forms of incentives and one of the most common forms is that of tax abatements. This is a type of Alabama small business incentives program where you can enjoy a reduction in the amount of tax that you or your company is required to pay in a specific situation. It is often offered on certain business opportunities or specific types of real estate. If you are doing business in Alabama and qualify for specific projects within the state then tax abatements will be applicable in the following areas:

  • Tax abatement in the non-educational part of any applicable sales and use tax on construction equipment, materials, as well as other capitalized costs.
  • The state offers property tax abatement on personal and real property that has been incorporated into a qualifying project
  • Tax abatements are also offered for new as well as expanding projects in non-educational state, county, and city property taxes

Income Tax Incentives

Small businesses like sole proprietorships, partnership firms, home-based businesses, and single-member LLC’s can apply for income tax incentives offered by the state. These Alabama small business incentives are available in several different forms like:

  • Heroes for Hire Income Tax Credit – Employers can leverage a $1,000 non-refundable income tax credit for hiring full-time, unemployed veterans.
  • Full Employment Act of 2011 Credit – This type of incentive allows small businesses employing 50 employees or less to qualify for the income tax credit. If you are doing business in Alabama and have 30 employees then you can receive an income tax credit equal to $1,000.

Apprenticeship Tax Credit

There are several Alabama small business grants that you can benefit from but the state also provides business incentive programs that can help small businesses in more ways than one. The Apprenticeship Tax Credit is one such tax incentive that provides income tax credit for employers employing an apprentice for a minimum of 7 months prior to their taxable year. You can apply this tax credit against your income tax as well as financial institution excise tax.

Ready to Start a Business in Alabama?

Every new startup or small and medium enterprises (SME’s) require some form of financial assistance during their formation stage. This is where Alabama grants for a small business can be quite useful. Once your business is set up and operational, you can even apply for a variety of Alabama small business incentives. The incentives will provide relief from taxes through credits and abatements or rebates. The important thing is to first register your small business in the state and this is where IncParadise can provide necessary guidance and assistance.

IncParadise is one of the most reputed incorporation providers as well as Alabama registered agent services. We can help you to start a business in this state. We also provide additional services that can help your company to maintain compliance with different state requirements.

Form a new business in Alabama today!