Massachusetts Incentives for Capital Projects and Equipment Upgrades for Manufacturing Facilities Part I

Growing green technology, chemical process, and other manufacturing companies may want to consider moving their facilities to Massachusetts thanks to state incentives meant to encourage growth in this sector. Additionally, companies already located here can benefit from state incentives for capital and equipment improvements. Manufacturing facilities can receive tax credits, bonds, loans and guarantees and specialty financing from MassDevelopment, the state's finance and development authority. Investments in industrial equipment improvements and capital expansion projects are subsidized through several key programs:

Bond Financing
Manufacturing facilities can tap into bonds from the state or federal level via the American Recovery and Reinvestment Act. These bonds typically have very low interest rates, as they often exempt from federal and state taxes. Tax-exempt bonds are usually the best option for equipment and real estate projects. They can also be supplemented by taxable bonds in cases where the company’s needs exceed its eligibility for tax-exempt bond financing.

Loans and Guarantees
MassDevelopment offers up to $1 million in loans or bank loan participation for equipment purchases and up to $5 million for real estate loans for eligible companies. Companies which export their product can receive additional financing, and, in some cases, finance 100 percent of their projects. MassDevelopment's loan programs are designed for more complex financing structures and can offer technical assistance to manufacturing facilities as well.

 
The Massachusetts Department of Revenue offers for-profit and non-profit business tax credits to companies which rehabilitate contaminated properties through its Brownfield Tax Credit Program. These credits can be applied towards state tax liabilities or sold to third parties.
 
Certain types of businesses may be eligible for MassDevelopment's specialty programs. For example:
  • The Emerging Technology Fund (ETF) provides up to $2.5 million in loans and $1 million in loan guarantees for tech companies that benefit the Massachusetts economy.
  • Exporter Financing programs provide technical assistance, overseas market research, interest-free 100 percent financing for equipment, insurance on foreign receivables and other incentives for exporters in the state.
  • The Brownfield Redevelopment Fund provides up to $100,000 in financing for site assessment of contaminated or underutilized industrial space as well as $500,000 in financing for environmental clean up. This is available in addition to the Brownfield Tax Credit Program.

Energy Efficiency Incentives
Manufacturing facilities in Massachusetts are eligible for rebates, low interest loans, tax credits and production incentives (i.e. renewable energy credits) for incorporating renewable energy or energy efficient improvements. These incentives can come from state or local departments--such as the Micro Wind Initiative offered through MassCEC, or from utility companies such as Holyoke Gas & Electric Commercial Energy Efficiency Loan Program. Taking advantages of these programs allow businesses to save in upfront costs as well as over time through lower utilities bills.