North Carolina Small Business Grants

Doing Business in North Carolina

North Carolina is one of the top states that supports business ideas by providing resources that are necessary for the growth of every type of entity. The state has a strong economy and several industries that have gradually become drivers of this growing economy. With a robust startup ecosystem of accelerators and incubators, along with the North Carolina small business incentives; the state has become a haven for tech entrepreneurs. Some of the top companies doing business in North Carolina include Lowe’s, Bank of America, Honeywell, Compass Group, Family Dollar, Food Lion, HanesBrands Inc., VF Corporation, and Truist Financial among others.

Why do companies prefer to do business in North Carolina?

Entrepreneurs and first-time business owners prefer North Carolina due to its geographical, industrial, and infrastructural advantages. One of these top advantages is the availability of resources such as the North Carolina small business grants and exemption programs. There are several factors that can make doing business in North Carolina easier and they include:

• Low taxes and Exemption programs – One of the reasons that small business owners prefer to start a company in North Carolina is because of the low taxes. This state has one of the lowest Corporate Tax Rates in the nation at 2.5 percent. Exemption programs further enable businesses to reduce their overall business tax burden, as well as other related costs. These exemptions are a part of the North Carolina small business incentives program and are available according to the industry a company is categorized in.

  Example: If you start a company in manufacturing then you can take advantage of Sales and Use Tax Exemption on machinery. If you are doing business in North Carolina and are based in a foreign trade zone (FTZ) then your merchandise will be exempt from payment of duty.

• Pro-Business and Startup Environment – North Carolina boasts of a pro-business environment as well as a strong start-up ecosystem. This pro-business environment is driven by several elements such as:
  • Low cost of living and high quality of life
  • Infrastructure and logistical support to facilitate import and export
  • Availability of skilled workers
  • Labor costs are lower than the national average
  • Availability of North Carolina small business funding
  • Accelerator and incubator programs for startups
• Advanced Technology Hubs – The state of North Carolina is quickly becoming one of the leading advanced information technology hubs in the nation. Charlotte and Raleigh–Durham have also become the top tech talent markets in the country. There are several salient aspects to these tech hubs like the availability of North Carolina small business grants, co-working spaces, state-of-the-art amenities for startups, shared equipment, and overall low startup costs.

Small Business Incentive Programs and Grants in North Carolina

Every business in its early stages has certain initial expenses. For this reason, a strong financial strategy is always recommended. Business expenses can be dynamic in nature, and can even exceed the predefined budget. In such a scenario, the North Carolina small business funding programs can be quite helpful. The most common is the traditional financing option, which consists of loans which may increase the overall debt of the company. It is hence important to identify alternative financing sources like North Carolina small business grants and incentive programs.

Small Business Grants in NC

North Carolina small business grants are programs that offer small amounts of funding also known as seed money to startups. A grant is awarded to private businesses and government entities, and unlike a loan, you are not required to repay a grant. The objective of a grant is to help entrepreneurs with doing business in North Carolina and is normally offered by nonprofits, government agencies, and other businesses as well. If you’re looking for grants then it is essential to conduct an in-depth search and apply for one that fits your business requirements. Let us take a look at some of the top business grant programs in the state of North Carolina.

Job Development Investment Grant (JDIG)

The Job Development Investment Grant (JDIG) is one of the top performance-based North Carolina small business grants. The program provides cash grants directly to entities that create jobs and invest in the state. The JDIG grant plays a key role in significantly offsetting the cost of expanding or locating a facility within North Carolina. Several factors considered when awarding the grant and they include:

• The location of your project
• County tier designation
• Number of net new jobs created in the state
• Wages of jobs created compared to the average wage of the said county
• Level of investment made by your company in the state
• The industry sector

One North Carolina Fund (OneNC)

The One North Carolina Fund (OneNC) is a popular North Carolina small business funding program. It is a type of discretionary cash-grant program with the help of which the Governor can quickly respond to any competitive projects that enable job creation in the state. The OneNC grant program utilizes North Carolina’s economic development tier system in its operations. This grant program is administered by the Department of Commerce. The factors considered when awarding the grant are:

• The total number of jobs created in the state
• The level of investment made by a company
• The location of their project
• The economic impact of their project
• The importance of their project to North Carolina and the region

One NC Small Business Program

The One NC small business program is comprised of two separate programs, which are:

• The SBIR/STTR Phase I Incentive Funds Program – This is a North Carolina small business incentives funds program that aims to provide reimbursement to qualified businesses in the state for the costs incurred during the preparation and submission of the Phase I of SBIR or STTR proposals to federal agencies.
• The SBIR/STTR Phase I Matching Funds Program – This is a North Carolina small business funding program that provides matching funds to those businesses in the state who have received a federal STTR or SBIR award.

Workforce Grants

A major requirement of every new business is a skilled workforce and North Carolina has an abundance of skilled individuals. The more skilled a workforce is, the more they will enable the economy to grow. Hence, workforce development is an important area of focus and North Carolina supports it through a variety of grant programs. The North Carolina small business grants programs provide salient benefits to employers, workers, and communities. The grants focus on several key areas like customized training, on-the-job training, workforce assistance, and Work Opportunity Tax Credit (WOTC). Your company can receive anywhere from $1,200 to $9,600 for each eligible employee as a part of WOTC.

Downtown Development Funds

In the state of North Carolina, downtowns are considered to be the economic and cultural centers of the various communities. The Main Street Solutions Fund is one of several important downtown development funds. The primary objective of this North Carolina small business funding program is to provide maximum financial support to small businesses in designated micropolitan areas situated within Tier 2 and Tier 3 counties, or within specific main street communities.

Form Your Startup in North Carolina Today!

Tax Exemption in NC

Different tax exemption programs are the main contributors to the ease of doing business in North Carolina. These tax exemption programs play a key role in offsetting the tax levied on entities in the state. Let’s look at some of the top programs in NC.

Manufacturing tax exemptions

North Carolina has one of the lowest tax burdens for business entities and to top it, they also offer several tax exemption programs. The most commonly applied exemption programs are those that are offered to the manufacturing industry. There are several North Carolina small business incentives programs for manufacturers such as:

• Sales and Use Tax Exemption on machinery and equipment
• Sales and Use Tax Exemption on raw materials
• Property Tax Exclusion on inventories
• Sales and Use Tax Exemption on electricity, fuel, and piped natural gas

Data center sales and use tax exemptions

Data centers are integral to the growth of the technology industry and IT companies. A single data center consists of a large group of computer servers networked together for the processing, storage, and distribution of a large amount of data. Business entities planning to open data centers can benefit from the sales and use tax exemptions targeted to this sector. The North Carolina small business incentives program for data centers provides sales and use tax exemptions on certain items like:

• Computer software sold to a data center
• The purchase of support equipment for a data center
• The purchase of electricity to be used at a qualifying internet data center

Large fulfillment facilities

There are several different types of sales and use tax exemption programs that your company can take advantage of. One such program caters to large fulfillment facilities. If you’re planning on doing business in North Carolina and want to open a large fulfillment facility in the state, then you can apply for this exemption. The exemption is applicable for the sales of equipment, attachments, accessories, or even repair parts purchased by the facility. The sales and use tax exemption is also valid for equipment and accessories used at the said facility for the distribution process.

R&D and Software publishing sales tax exemptions

The R&D and software publishing sales tax exemption is one of the most popular North Carolina small business incentives programs. The R&D sales tax exemption is applicable primarily for Research and Development activities conducted by companies focused on engineering, physical, and life sciences, or any company within the industry group with NAICS code 54171. The software publishing sales tax exemption is applicable for the sales of equipment or any repair part of an equipment for a company engaged primarily in software publishing activity.

Pollution abatement equipment and recycling

When it comes to pollution abatement equipment and recycling in North Carolina, there are two types of tax exemptions applicable. They are:

• Sales and use tax exemption – pollution abatement equipment used for manufacturing is exempted from sales and use tax in the state. Your company can be eligible for this North Carolina small business incentives program if you are using equipment, parts, and accessories used for eliminating, preventing, or reducing air and water pollutants that are emitted due to your manufacturing processes.
• Property tax exemption – You can utilize this exemption if your real and personal property is being used exclusively for waste disposal, air cleaning, or to reduce air and water pollution.

Historic preservation tax credit

You can apply for this tax credit program if you are doing business in North Carolina that focuses on the rehabilitation of an owner-occupied historic residence, as well as any income-earning historic properties. This program is meant only for certified historic structures. There is a 15% state tax credit for the rehabilitation of income-generating certified NC historic structures.

Foreign trade zone (FTZ)

North Carolina has four foreign trade zones (FTZ), also known as free trade zones. The FTZ is a geographically designated secured area, considered to be outside of the U.S. Customs territory for legal purposes. This is basically a duty-free zone for companies. The FTZ program allows a North Carolina-based company to reduce, defer, or eliminate customs duty on products being admitted into this zone. The FTZ programs are one of the important North Carolina small business incentives programs for import and export businesses.

Export Support

Exports play a key role in North Carolina’s economy. Therefore, the state has introduced several support programs for businesses. One of the salient highlights is the State Trade Expansion Program (STEP), which is a North Carolina small business grants program. This program is an important component of the National Export Initiative (NEI), and the grant amount is based on parameters like total value of exports, and number of global markets being exported to.

Ready to Start a Business in North Carolina!

Each new and existing business requires financial assistance for both the initial setup and operational stages. You may require North Carolina small business funding options to handle various requirements for your company. If you are in the planning stage of starting a new business in this state, then you will need to register your company in order to apply for the North Carolina small business grants.