Manufacturing Company Resources

Job Creation
 

Economic Development Incentive Program (EDIP)

Type: Tax Credit

Agency: Mass. Office of Business Development

The EDIP, capped at $25M annually, provides eligible companies with state and local tax incentives in exchange for projects promising job creation, manufacturing retention, private investment, and out-of-state sales commitments. There are 5 types of EDIP projects: Expansion Projects (EP), Enhanced Expansion Projects (EEP), Manufacturing Retention & Job Growth Projects (MRP), Job Creation Projects (JCP), and Local Incentive Only Projects.  These programs require the approval of the Economic Advisory Coordinating Council (EACC) which meets quarterly. There were significant changes to these programs as a result of a recent change in the governing statute.  In January the EACC will be amending its policies to reflect the impact of the new law.

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Manufacturing Retention & Job Growth Projects (MRP)

Type: Tax Credit 

Agency: Mass. Office of Business Development

Eligible companies must create a minimum of 25 full-time net-new to Massachusetts jobs and/or retain a minimum of 50 full-time manufacturing jobs. The project must be located in a Gateway City.  Must be supported by the municipality but doesn’t require TIF or STA.  Significant capital investment is required. 

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Local Only Incentive Programs: TIF & STA's

Type: Real Estate Tax Reduction

Agency: Municipal

Tax Incentive Financing (TIF) is a negotiated agreement between the business and the municipality.  The percentage exemption applies to the incremental increase of assessed value of the property.  The business pays the full tax rate on the “base value.” The agreement can include exemptions on personal property as well.  Term is a minimum of 5 years and a maximum of 20 years.  The percentage of exemption may range from 5% to 20%. Special Tax Agreement (STA) is also a negotiated agreement between the business and the municipality.  Current as well as future incremental real estate taxes are exempted as follows:  Year 1 – 100%; Year 2 – 75%; Year 3 – 50% and Year 4 – 25%. Thereafter, the business pays 100%.

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Workforce Development

 

Workforce Training Fund Program (WTFP)

Type: Grant

Agency: Commonwealth Corp.

The WTFP provides grants to MA businesses to fund training for current and newly hired employees. In order to qualify, businesses must pay into the Fund. The program is targeted to small or medium-sized businesses that would not be able to invest in improving employee skills without the WTFP. The WTFP has three programs: General Program Training Grants, Express Grant Program, and Direct Access Program as well as Technical Assistance Grants.

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General Program Training Grants

Type: Grant

Agency: Commonwealth Corp.

Open to all business sizes, this program offers businesses grants of up to $250,000 in skills training for current and newly hired workers. Employers, employer organizations, labor organizations, training providers, and a consortia of such entities are encouraged to apply. Training programs must be completed within two years and applicants can use the training provider of their choice.

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The Direct Access Program

Type: Grant

Agency: Commonwealth Corp.

The program addresses smaller-scale training needs by making training slots available free of charge to businesses that are eligible for the WTFP. Businesses should consider the pilot program when training needs cannot be easily met by a consortium or Express Program grant.

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One-Stop Career Centers

Type: Recruiting Assistance

Agency: Mass Office of Labor and Workforce

The Commonwealth’s network of centers are capable of providing a business with:  access to qualified candidates, applicant pre-screening, posting of jobs, assistance with small and large-scale recruitment activities, help planning job fairs and testing and assessment of candidates.

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Research & Innovation Support

 

Research & Development Tax Credit

Type: Tax Credit

Agency: Mass. Office of Business Development

This program, designed after the federal credit program, offers a tax incentive for R&D investment for both manufacturers and R&D companies. The credit is divided into two categories, a 10% credit for qualified expenses and a 15% credit for basic research payments to research organizations such as hospitals and universities.

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Manufacturing Innovation Grants

Type: Grant

Agency: MassDevelopment

Helps small- and medium-sized manufacturers access equipment, receive expert consulting on product development, and stay competitive. MassDevelopment will pay the lesser of $75,000 or 75% of the contract cost. Massachusetts manufacturers with 100 or fewer employees can get subsidized services at designated Innovation Centers. Chosen for their technical expertise and experience working with manufacturing companies, the Centers provide guidance and equipment for product development, prototyping, scale-up and cost reduction.

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Financing

 

Subordinated Loans

Type: Loan

Agency: Mass. Growth Capital Corp.

Loans made in conjunction with bank financing. Typically, the bank will have a senior position on assets and MGCC will be in a subordinated position. These loans are usually written as 5 year Term Loans.

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Lines of Credit

Type: Loan

Agency: Mass. Growth Capital Corp.

When a company needs to receive partial advances of loan proceeds to meet working capital needs, such as for a seasonable business, a one year Line of Credit may be appropriate. A Line of Credit may be renewed for a second year or may be converted to a Term Loan.

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Term Loans

Type: Loan

Agency: Mass. Growth Capital Corp.

Working capital requirements are not often easily handled within one year. Cash flow is typically insufficient to repay all but the smallest loan in a year. Five year Term Loans therefore provide a useful time frame – long enough for cash flow to increase and to allow MGCC to be repaid.

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Contract and Purchase Order Financing

Type: Loan

Agency: Mass. Growth Capital Corp.

Winning a contract or a purchase order usually requires a firm to support labor, materials and overhead cost before billing and being paid for the work. Contract and Purchase Order financing can bridge this timing gap. Typically, a percent of the order value will be loaned, and repaid when the firm receives payment.

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Guarantees

Type: Loan Guarantee

Agency: Mass. Growth Capital Corp.

If a bank cannot extend needed credit because the collateral is inadequate, MGCC can provide a partial and limited Guarantee to enable the bank to make the loan.

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Working Capital Loans

Type: Loan

Agency: Mass. Growth Capital Corp.

Working capital can be provided for most business operational purposes. Not typically finance real estate development.

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Emerging Technology Fund

Type: Loan and Guarantee

Agency: MassDevelopment

The Emerging Technology Fund (ETF) provides MA startups or emerging tech companies with financing for working capital, manufacturing facilities, and equipment. The ETF specifically offers: loans up to $2.5M and loan guarantees up to $1M. Eligible companies must be starting or expanding manufacturing operations in MA, market demand, and proven fundraising, among other requirements. 

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Equipment Loan

Type: Loan

Agency: MassDevelopment

For companies expanding operations and need to purchase equipment. The program offers loans up to $2M, fixed rate financing, and loan advance rates up to 85% of the cost of new equipment. Exporters may receive 100% financing for new equipment. 

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Real Estate Loan

Type: Loan

Agency: MassDevelopment

MassDevelopment offers real estate loans to help fund facility acquisition, renovation, construction, and permanent financing up to $7.5M. This is great for manufacturers, small businesses, and nonprofits. 

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Working Capital Loans

Type: Loan

Agency: MassDevelopment

MassDevelopment provides Manufacturing Planning Loans up to $50,000 with low interest rates and terms of up to five years. Loans can be used by manufacturing companies to pay for consultant services. Eligible consultant contracts include services to evaluate and improve demand (sales and marketing), fulfillment (operations improvement), and finance and administration (strategic leadership).

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Sales

 

Single Sales Tax Treatment

Type: Tax Credit

Agency: Mass. Office of Business Development

Massachusetts single weights sales when assessing apportionment taxes for manufacturers. The single sales factor apportionment is the ratio of Massachusetts sales to overall sales. Net income subject to Massachusetts tax is determined by multiplying overall net income by the apportionment factor. Many other states use three-factor apportionment which weighs the state sales, property and payroll as a percent of overall sales, property and payroll. This is advantageous for companies with significant property and employees, as it won’t be a factor in determining the amount of tax. Additionally, this provision does not penalize companies for continual investment in the business or for hiring more employees. 

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Sales and Use Tax Exemption

Type: Tax Credit

Agency: Mass. Office of Business Development

Massachusetts exempts all manufacturing equipment and all R&D equipment from sales and use taxes.

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Capital Investment

 

Manufacturers Investment Tax Credit

Type: Tax Credit

Agency: Mass. Office of Business Development

Eligible companies can claim a 3% ITC on depreciable assets as a DOR registered manufacturer. Manufacturing entities most likely will be eligible to take advantage of the 3% Investment Tax Credit. The credit is calculated by computing 3% of the total capital investment in qualified equipment and facility leasehold improvements. This amount can be applied directly against any Massachusetts tax obligation. The maximum amount of credits, otherwise allowable in any one taxable year to a corporation, may not exceed fifty per cent of its excise. A corporation may carry over and apply to its excise for one or more of the next succeeding three taxable years the portion of those credits, as reduced from year to year.

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Collaborative Workspaces

 

Algonquin Industries

Type: Innovation Center

Agency: Private

Manufactures precision machined and sheet metal fabricated products in a wide variety of materials. Our engineering services at the prototype level can provide cost efficient solutions for manufacturability in production. Value added capabilities in both mechanical and electro-mechanical assemblies are available to complete your product for market.

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Boston Engineering Corporation

Type: Innovation Center

Agency: Private

Provides the product development, engineering, and manufacturability expertise – along with product development software and infrastructure – to commercialize successful products in today’s competitive market.

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Connecticut Center for Advanced Technology Inc.

Type: Innovation Center

Agency: Non Profit

Machining processes, additive manufacturing (metals, 3D plastics), and reverse engineering solutions to help companies run better, faster, and more efficiently by integrating technologies that increase productivity without disrupting your current operations.

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Worcester Polytechnic Institute

Type: Innovation Center

Agency: Higher Education

Consulting services in financial modeling, equipment justification, technical analysis, commercialization, and process development, utilizing faculty, alumni, undergraduate and graduate students in engineering and management.

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MAmanufacturing.com

Type: Web Resource

Agency: MassDevelopment

Web resource from MassDevelopment outlining manufacturer resources and programs. 

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Real Estate

 

MassEcon

Type: Relocation Services

Agency: Non Profit

MassEcon is a nonprofit specializing in on-the-ground services to companies seeking to expand within or relocate to Massachusetts. MassEcon also engages with prospective businesses at tradeshows across the nation to help sell Massachusetts.

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