Business Financing

Bonds, loans and other financing options, on both state and local levels, will help get your business up and running in Bay City. Here are some examples.

Tax-Exempt Industrial Development Revenue Bonds

The Michigan Strategic Loan Fund or the Economic Development Corp. of the City of Bay City can provide the maximum allowable use of Industrial Development Revenue Bonds financing. IDRBs lower the cost of borrowing to approximately 70% to 80% of prime rate for eligible capital expenditures. This is due to the federal tax exemption on interest paid to the bond borrower (and state taxes in certain cases). Use of bond proceeds is limited to acquisition of land, machinery and equipment; and construction, renovations or acquisition of buildings.

Taxable Revenue Bond

The Taxable Revenue Bond (TRB) provides companies with potentially longer term financing (10-20 years), often at a fixed rate and lower cost than conventional financing, and is exempt at the state and local level if purchased by Michigan taxpayers. These bonds are not restricted by the IRS, and can be used to finance projects of more than $10 million. They can be used as working capital and to finance commercial, pollution control, agricultural and recreational projects.

Small Business Administration 504

For qualified small businesses, the Single Business Administration 504 program can provide subordinated, fixed-asset financing at long-term Treasury bond rates. Loans are limited to the lesser of $750,000 or 40% of project financing requirements.

Loan Guarantees

Through local banks, the City of Bay City works with the Single Business Administration and the Rural Development Agency on projects that require loan guarantees from one of those agencies to secure private financing on eligible projects.

State Venture Capital

The Alternative Investments Division of the Michigan Department of Treasury offers a pool of venture capital for qualified, fast-growing companies seeking equity funding. Typically, the venture capital program is used to support new, high-tech companies on the cutting edge of industrial technology.

Tax Incremental Financing

Tax increment-financing capture taxes generated from new capital investment except school millage and debt millage. The "capture" can be used for a variety of purposes including, but not limited to, project-related infrastructure improvements, i.e. road, water, sewer and site development (such as land balancing, mass grading and landscaping). Tax increment financing can be used through a Local Finance Development Authority, a Downtown Development Authority or a Brownfield Redevelopment Authority.