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Credits, Grants & Other Incentives

Entrepreneurs seeking startup funds should look beyond the traditional lenders, such as the bank, family or friends. Tax credits, grants and incentive programs could also add cash to the bottom line, and unlike loans, they don't require repayment.

Tax Credits

  • Sustainable Business Tax Credit.
    Businesses located in the City of Philadelphia can be classified as certified sustainable businesses once they are certified as B Corporations. B Corporations meet comprehensive and transparent social and environmental standards via the B Rating System.

    Once certified, a business shall remain eligible to receive Sustainable Business Tax Credits each year that such tax credits are available. For tax years 2012 through 2017, an eligible business shall receive a tax credit of $4,000, which may only be used against the tax based upon annual receipts. Program regulations and applications will be made available several months prior to the filing due date for the Tax Year 2012 Business Income and Receipts Tax return. No more than twenty-five (25) businesses will be certified as Sustainable Businesses in any one tax year.

    Application for the Business Income and Receipts Tax Sustainable Business Tax Credit

    Additional Information:
    Learn More about B Corporations
    Becoming a Certified B Corporation

  • Green Roofs Tax Credit
    Credits of 25% of all costs incurred to construct the Green Roof, to a maximum of $100,000, can be applied against Philadelphia’s Business Income and Receipts Tax liability.

  • New Markets Tax Credit
    This federal tax credit is designed to generate private-sector capital investment in low-income areas. The program permits individual and corporate taxpayers to receive credit against their federal income taxes for making qualified equity investments in projects that finance community development, stimulate economic growth, and create jobs. Learn more through local providers:
  • Pennsylvania Job Creation Tax Credit (JCTC)
    The PA JCTC offers a $1,000 per-job tax credit to approved businesses that agree to create jobs in the Commonwealth within a three-year period. The credit can be applied against various other business tax liabilities.
    Contact:
    PA Department of Community and Economic Development
    (866) 466-3972

  • Philadelphia Job Creation Tax Credit
    The City of Philadelphia offers eligible business owners a one-time tax credit of up to $5,000 for each new qualified full-time job created in the city. Certain guidelines apply.

    Contact:
    Department of Revenue
    (215) 686-6600

  • Real Estate Tax Abatement
    The City of Philadelphia offers a 10-year abatement of real estate taxes on qualifying rehabilitation or construction to encourage urban development and improvements to certain deteriorated industrial and commercial properties.

    Contact:
    Board of Revision of Taxes
    (215) 686-4334

  • Welfare to Work Credit
    This incentive program aims to promote the hiring of workers with barriers to employment, targeting long-term welfare cash recipients. Tax credits of up to $8,500 per hire are available.

  • Work Opportunity Tax Credit
    This is an incentive program to promote the hiring of workers with barriers to employment. The program targets short-term welfare cash recipients, veterans, SSI recipients and ex-felons. The WOTC is 40% of the first $6,000 in wages.

  • Philadelphia Re-Entry Employment Program (PREP) The Philadelphia Re-Entry Employment Program (PREP) was established for securing job creating economic development opportunities for ex-offenders through the expansion of existing businesses and the attraction of economic development prospects for the City of Philadelphia.

    Guide to the Philadelphia Reentry Employment Program  (New) 
Application
  • Tax Credit Application for Contribution to a Community Development Corporation (CDC) Businesses contributing to Community Development Corporations may be eligible for a tax credit against the City’s Business Income and Receipts tax.

    Application

  • Jump Start Philly Exempts qualifying business from paying the Business Income and Receipts Tax, formerly the Business Privilege Tax, during the first two years of operations. Additionally, fees are waived for eligible new businesses for a variety of licenses and registrations, including the Commercial Activity License, formerly the Business Income and Receipts License.

    More Information

  • Small Business Health Care Tax Credit
    Small businesses that provide health care coverage to their employees and that meet certain requirements generally are eligible for a federal income tax credit for health insurance premiums they pay for certain employees. The employer must have fewer than 25 full-time equivalent employees (FTEs) for the tax year and the average annual wages of its employees for the year must be less than $50,000 per FTE.

    Amount of Credit
    • Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010 (25% for tax-exempt employers). On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
    • Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.


    Eligibility Rules
    • Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
    • Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
    • Average annual wage. A qualifying employer must pay average annual wages below $50,000.
    • Both taxable (for profit) and tax-exempt firms qualify.

    More information is available from the IRS

Grants

  • High Performance Building Program
    This State of Pennsylvania program provides grants (up to $500,000 or 10% of the total eligible building construction/renovation costs, whichever is less) or loans to help underwrite the cost premiums associated with the design and construction or major renovation of high-performance buildings, as identified in the Guidelines.

    Contact:
    (717) 783-0225
    Email

  • Homeownership Rehabilitation Program (HRP)
    This City of Philadelphia program provides developers a subsidy for the rehabilitation of vacant houses to be sold to homebuyers. The maximum subsidy is $35,000 per property but can be averaged across properties in the same zip code or in close proximity. An additional subsidy of up to $15,000 can be provided on a dollar-for-dollar matching basis on projects that have other subsidies or developer fee contributions.

    Contact
    Rich Franck:
    (215) 448-3072
    Email(preferred)

  • PA Dept. of Community & Economic Development Grants
    The DCED provides grants up to $35,000 (also, loans) for the utilization, development and construction of alternative and clean energy projects. The funds may be used for any of the Clean Energy Project costs as explained in the Guidelines.

    Contact:
    PA Department of Community and Economic Development
    (717) 787-7120

  • Pa. Dept. of Economic Development Business Assistance Programs
    These State of Pennsylvania programs are available to PA residents for land and buildings, machinery and equipment, working capital, workforce development, and research & technology development activities.

    Contact:
    (866) 466-3972

  • Small Business Energy Efficiency Grant Program
    Reimbursement grants up to $25,000 are available from the PA Department of Environmental Protection (DEP) to help small businesses acquire equipment or adopt processes that promote energy efficiency.

  • Training Grants
    The Philadelphia Workforce Development Corporation (PWDC) provides grants up to 50% of employee training costs.



Location-Based Incentives

  • Keystone Innovation Zones (KIZ )
    KIZs are Commonwealth-designated areas that foster job growth by connecting discoveries in educational institutions to technology transfer and entrepreneurship opportunities. Companies locating in a KIZ, in operation for less than 8 years and meeting targeted industry requirements specific to each zone are eligible for certain benefits, including state tax credits. For more information visit Philadelphia’s two KIZs – the Navy Yard KIZ and the University City KIZ.

  • Keystone Opportunity Zone Program (KOZ)
    KOZs are parcel-specific areas where property owners and/or businesses that meet capital investment or new employment targets pay little or no taxes through 2010, 2013 or 2018. These taxes include the Business Income and Receipts Tax, Use and Occupancy Tax, Real Estate Tax, Net Profit Tax, State Business Tax, and State sales tax on items consumed at the KOZ site. KOZ sites are located throughout the City, including industrial parks, high tech centers and the Navy Yard.

  • Storefront Improvement Program (SIP)  This program reimburses owners of commercial buildings and businesses within designated commercial corridors who make storefront improvements. The program can reimburse up to 50% of the cost of eligible improvements to a maximum of $8,000 for a single commercial property, or up to $12,000 for a multiple-address or corner business property.

    Guidelines and eligible commercial corridors.

    Contact:
    (215) 683-2100

Other Incentives

Entrepreneur Works

  • Small Business Loans
    Entrepreneurs participating in either a peer group, business course or individualized training are eligible for a direct loan product. The Small Business Loan (SBL) program offers loans of up to $25,000 for existing businesses and up to $15,000 for start-ups. SBLs are not tied to membership in a peer group and those applying are eligible to receive assistance assembling their loan package. Unlike a peer loan, applying for a SBL will require a credit check and assignment of collateral.

  • Peer Loans
    Entrepreneurs who become members of an Entrepreneur Works chartered peer group are eligible to apply for loans graduating in steps from $500 to $5,000. Individual members must make loan requests through their peer group. Peer loans follow a stepped-loan model, where an individual takes a small loan, successfully repays it, and is then eligible to borrow at a higher loan level (e.g. borrower takes a first loan of $500, successfully repays, and returns to borrow $1,000). Peer loans range from $500 to $5,000 and start at two levels: $500 (basic) or $1,500 (accelerated) depending on the length of their business ownership/experience. Both tracks cap out at $5,000 using a graduated step process. Peer loans do not require a certain credit score or the pledge of collateral; however, each loan must be unanimously approved by the borrower's peer group members. Peer borrowers are not judged on their credit but are offered the opportunity to have their credit pulled and reviewed.

  • Loan Partnering and Referrals (for requests over $25,000)
    In certain cases, Entrepreneur Works will work with partner programs to provide loans over $25,000.

    For more information, visit www.MyEntrepreneurWorks.org

    Contact:
    111 S. Independence Mall East, Suite 810
    The Bourse Building
    Philadelphia, PA 19106
    Phone: 215.545.3100
    Fax: 215.925.2485

 

Greater Philadelphia Urban Affairs Coalition (GPUAC)

  • Philadelphia Business Builder Loan Program
    This program provides a pathway for small businesses with higher credit risks to obtain bank financing. Loans can be used for working capital, inventory, equipment purchase or capital improvements. This program is intended to increase the flow of capital to small businesses located in low- and moderate-income and /or predominately minority communities in the City of Philadelphia.

    More Information

    Contact:
    1207 Chestnut Street
    6th Floor
    Philadelphia,19107
    Phone: 215-851-1738
    Fax: 215-564-9912


The Enterprise Center Capital Corporation (TEC-CC)
  • Micro-Lending
    TEC-CC through the Grow Philadelphia Fund, finances Philadelphia-based businesses.
  • Loan Packaging
    TEC-CC offers loan packaging services for small business owners at affordable prices. Through this program, many businesses have obtained U.S. Small Business Administration Guaranteed Loans.
  • Third Party Transactions
    TEC-CC acts as a financial intermediary to secure financing (up to $35,000) for clients through traditional financial institutions, non-traditional lenders, and quasi-government agencies.

    More Information

    Contact:
    4548 Market Street
    Philadelphia, PA 19139
    Website
    Telephone: 215-895-4026
    Fax: 215-895-4001
    E-mail

Women's Opportunities Resource Center of Greater Philadelphia (WORC)

  • Economic Opportunities Fund (EOF): This fund offer loans, investment products and services to low-income and underserved populations in the Philadelphia Metropolitan Area looking to start or expand their businesses, with a special focus on women and minorities.

Types of Loans include:

  • Credit Builder Loans of $500 to $1,000
  • Direct Loans of $500 to $2,500
  • Credit Lines of up to $2,500
  • Small Business Loans of up to $10,000 (for existing business only)
  • Near Equity Loan Product - up to $35,000

    More Information
    Contact:
    2010 Chestnut Street
    Philadelphia, PA 19103
    Phone: 215-564-5500
    Fax: 215-564-0933
    E-mail

 

The Merchants Fund (TMF)
The mission of The Merchants Fund (TMF) is to provide financial assistance to current and past merchants in Philadelphia.  Beneficiaries of TMF are current or former business merchants and must demonstrate a legitimate financial need.  TMF provides assistance in three areas:

Operating Businesses: The Merchants Fund is committed to providing for the economic needs of the merchant community with modest grants in the areas of Business Stabilization, Emergency Situations, and Loan Matching.

  • ReStore Retail Grants
    The Merchants Fund is making this new program available through funding from the City of Philadelphia Commerce Department.
  • Special Grants
    The Merchants Fund selectively awards grants to foster the betterment of a group of merchants on a corridor or in a business district.

    More Information

    Contact:
    The Merchants Fund
    1616 Walnut St, Suite 802
    Philadelphia, PA 19103
    Phone: 215-399-1339
    Fax: 215-399-1340
    E-mail

General Information

  • The Local Initiatives Support Corporation
    The LISC Products and Services Guide outlines financial products and community services that LISC provides to community development corporations for building and developing sustainable Philadelphia communities.

    These include:
    1. loans, grants and equity investments
    2. technical and management assistance

    Contact:
    (215) 923-3801
    LISC Website

  • Philadelphia Industrial Development Corporation
    PIDC provides an array of services to help local businesses become more profitable, provide goods and services, and generate jobs that keep Philadelphia’s economic foundation strong. This includes a range of financial and managerial services, including direct loans to small businesses and minority contractors.

    Contact:
    (215) 496-8020
    PIDC Website

  • Find additional business funding/grant sources available through the Commonwealth of Pennsylvania at NewPA.com.