The Industrial Development Revenue Bond Program reduces the interest costs of financing projects for companies through the issuance of both taxable and tax-exempt bonds. Sales tax exemptions are granted for this type of public financing. Other tax incentives, such as those through the Mississippi Rural Economic Development Assistance Program (RED) as described in a subsequent section of this brochure, may be available. Ad valorem exemptions may be granted if approved by the appropriate city and county.
The Mississippi Small Enterprise Development Finance Program (SED) enables the Mississippi Business Finance Corporation (MBFC) to make loans to qualified private companies that will increase employment and investment in the State. The State of Mississippi issues general obligation bonds as the source of funding under the SED Program. The bonds are issued on a composite basis. The costs of issuance are prorated to each company participating in the issue, allowing companies to obtain tax exempt financing that would otherwise be unavailable due to prohibitive costs.
This program provides tax-exempt financing for small projects, and gives banks in the State, which meet MBFC criteria, an opportunity to issue letters of credit to support these efforts. The combination of lower than market interest rates and a fixed term make this program an attractive alternative for projects requiring loans of $4 million or less. Sales tax exemptions are granted for this type of public financing. Other tax incentives, such as those through the Mississippi Rural Economic Development Assistance Program (RED), as described in a subsequent section of this brochure, may be available. Ad valorem exemptions may be granted if approved by the appropriate city and county.
The Mississippi Rural Economic Development Assistance Program (RED), administered by the Mississippi Business Finance Corporation (MBFC), is a program designed to enhance projects which are to be financed through the Industrial Development Revenue Bond Program (IRB) and the Small Enterprise Development Program (SED). Companies that meet eligibility requirements to finance projects through the IRB and SED Programs may qualify to receive Mississippi corporate income tax credits and ad valorem exemptions under the RED Program. Eligible companies under the IRB Program are manufacturing facilities, processing facilities, certain warehouse and distribution centers, certain telecommunication and data processing companies, multi-state national or regional headquarters, certain research and development and technology intensive enterprises. Eligible companies under the SED Program are manufacturers and processors. Credit amounts available to an eligible company are a function of the company’s project-related debt service. The annual debt service for a project includes all costs associated with the issuance of bonds, letters of credit, annual service fees, and principal and interest payments.
For companies eligible for the RED Program, a financing agreement addressing the provisions of the RED Program will be required as a part of the bond issue.
The Mississippi Loan Guaranty Program, administered by the Mississippi Business Finance Corporation (“MBFC”) acting on behalf of the State of Mississippi, strengthens and builds the small business concept in the State of Mississippi (“State”) by enabling small businesses to obtain term financing through the use of loan guarantees. As a result of the loan guarantee protection, lending institutions are more likely to provide financing not otherwise available to small businesses by substantially reducing their exposure in the event of defaults.
A summary Of Mississippi incentives for new and expanding industry.