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Business Development Incentives:
Loans, Tax Credits and Other Programs


Loans

Rural Development Initiative Fund:

Provides private sector employment by financing the start-up and expansion of businesses that will create significant long-term employment.

  • Loans may be made for working capital, equipment, construction or other commercial purposes.
  • Loans must result in the creation of new jobs or the retention of existing jobs in the eligible community.
  • Loans may be made to a business located in a community with a population of 5,000 or less that is not connected by road or rail to Anchorage or Fairbanks, or with a population of 2,000 or less that is connected by road or rail to Anchorage or Fairbanks.

Small Business Economic Development (SBED):

Provides private sector employment by financing the start-up and expansion of businesses that will create significant long-term employment. Generally, a business must have fewer than 500 employees, have a net worth under $6 million and have an average net income after federal taxes for the preceding two years less than $2 million to qualify. Eligibility for the SBED program includes all communities in the state of Alaska with a population of less than 30,000. Loans in communities of 30,000 or more are available on a limited basis, depending on funds availability.

Commercial Fishing and Agriculture Bank:

Provides loans to fishing, tourism, natural resources and agriculture-based projects. The Financing Section of the Divison of Economic Development provides loans to fishing enterprises and other small business ventures.

Alaska Growth Capital:

Provides financing to nontraditional borrowers/businesses that use innovative technology, are in rural Alaska, and are minority-owned.

Commercial Fishing Loan Fund:

Provides long-term, low interest loans to promote the development of predominantly resident fisheries, and continued maintenance of commercial fishing vessels and gear for the purpose of improving the quality of Alaska seafood products.

Alternative Energy Conservation Loan Fund:

Loans may be made to purchase, construct and install alternative energy systems or energy conservation improvements in commercial buildings. Maximum loan amount is $50,000.  Loan requests over $30,000 require a letter of denial from a financial institution, stating the reason(s) for denial, or confirmation that a loan from a financial institution is contingent on the applicant receiving a loan from the fund. Maximum loan term is 20 years.
All loans must be adequately secured, include a lien on real property, and the improvements financed.

  • Loan must be for the purchase, construction and installation of alternative energy systems or energy conservation improvement in commercial buildings.
  • Loans must result in alternative energy production or energy conservation.

Commercial Charter Fisheries Loans:

To provide affordable loans to Alaskan commercial charter operators to promote Alaskan ownership of charter halibut permits. General Requirements:

  • Loans may be made to purchase charter halibut permits or refinance vessels or gear purchased more than 12 months before receipt of the application.
  • Maximum loan amount $200,000 for a permit loan and $100,000 per year for other loan types, with maximum aggregate outstanding loan balances of $200,000 made to a borrower.

Mariculture Loans:

To provide affordable loans for the planning, construction, and operation of a mariculture business.

  • Loan must be for the planning, construction, and operation of a mariculture business.
  • Must have a permitted mariculture farm location in Alaska.
  • Must have experience or training in the mariculture industry.

MICROLOAN LOAN PROGRAM:

To promote economic development in Alaska by helping small businesses access needed capital..

  • Loans may be made for working capital, equipment, construction or other commercial purposes for a business located in Alaska.
  • A reasonable amount of money from other non-state sources must be committed for use on any project for which money from a loan will be used.
  • Maximum loan amount is $35,000 to a person or up to $70,000 to two or more persons.

MICRO LOAN PROGRAM FOR WOMEN ENTREPRENEURS:

Provides lending opportunities to women-owned businesses which may or may not qualify for conventional funding. The loans also serve as an opportunity for women to establish credit for their businesses. Women entrepreneurs interested in a loan of up to $10,000 to start, develop or stabilize a viable business must:

  • be a U.S. citizen
  • be at least 21 years old and have no criminal record
  • be 51 percent owner and operator of the small business
  • have a solid, completed business plan for a viable enterprise
  • show proof of entrepreneurship capabilities
  • submit a complete loan package

Tax Credits

OIL AND GAS EXPLORATION TAX CREDITS:

Allow for a production tax credit for certain exploration geophysical survey and drilling activities as an alternative to the QCE credits under AS 43.55.023. Provisions for exploration drilling credits under this statute are different for areas inside of and outside of the Cook Inlet sedimentary basin.

MINERALS EXPLORATION TAX CREDITS:

Taxpayers may take a credit for 100 percent of eligible costs of exploration activities related to determining existence, location, extent or quality of a locatable mineral or coal deposit. The incentive may not exceed $20 million and must be applied within 15 tax years after the taking of the credit is approved. Application of the credit is limited to 50 percent of the lesser of the taxpayer’s mining license tax liability or 50 percent of the taxpayer’s total corporation net income tax liability.

FILM PRODUCTION TAX CREDITS:

An incentive program that provides a transferable tax credit based on qualified production expenditures as an incentive for film and television productions to shoot in Alaska.

  • 5 percent on compensation to non-Alaska resident producers, directors and lead actors (above the line personnel).
  • 30 percent on most qualified expenditures (ground spend) in Alaska.
  • extra 20 percent for wages paid to Alaska residents.
  • extra 6 percent for production costs incurred in a rural area.
  • extra 2 percent for production costs incurred between October 1 and March 30.
  • no salary cap or production cap.
  • Alaska spend must be at least $75,000 in a consecutive 36 month period.

Film Incentive Tax Credits are typically purchased at a discount by companies with Alaska tax liabilities and can be split as needed between multiple tax years (credits are valid for up to 6 years from date of issue).

EDUCATION TAX CREDITS:

Taxpayers that contribute to vocational education programs or accredited Alaska universities or colleges for educational purposes or facilities may claim a tax credit against corporate income tax, the insurance premiums tax, the oil and gas production and property taxes, the fisheries business and landing taxes, and the mining license tax. For tax years after December 31, 2013, the credit will be capped at $150,000.


Other Programs

ALASKA PRODUCT PREFERENCE PROGRAM:

a State of Alaska preference applied to in-state bids on State contracts, or proposals in response to a request for proposal. Under the State’s procurement code, the Alaska Product Preference can provide a local bidder or offeror with a cost preference between three and seven percent. 

MADE IN ALASKA (MIA):

The program’s mission is to identify and promote products made, manufactured, or handcrafted in the state. Products which meet program criteria are eligible to use the MIA logo. The use of the MIA logo serves both producers and consumers by certifying product authenticity. Certified products range from small gift items to large industrial modules.