Pinnacle Consultants L.L.P.

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Financial Review

Is Your Business Taking Advantage of Phoenix Business Assistance Programs?

There are many programs offered by the City of Phoenix to assist businesses. If you are currently doing business in the valley or have plans to in the future, you may want to take note of some of the programs listed below.  These programs could have a significant impact on your company's bottom line.

New Markets Loan Program offers below market rate financing for acquisition, rehabilitation, expansion or new construction of commercial real estate projects, including retail, office, and industrial/manufacturing space.  Projects must be located in census tracts that show 20% or more people living below the poverty level or median family income less than 80% of the metropolitan area.  The participant must maintain the investment for 7 years in a low income community, and meet criteria for the type of business operation, gross income, employee service and tangible property use. 

Enterprise Zone (EZ) Program is a state program administered by the Arizona Department of Commerce to encourage creation of quality jobs and capital investment in distressed areas of the state. The program was authorized by the Arizona State Legislature in 1990 and amended in 1996. The current program operates under 2006 legislation and is authorized until June 30, 2011.

The city of Phoenix Enterprise Zone makes it more profitable to do business in designated areas of the city. Any company located in an Enterprise Zone can claim up to $3,000 in tax credits by creating net new quality jobs within the zone. Small manufacturing firms additionally may qualify for significant property tax reductions over five years.

Foreign Trade Zone (FTZ) offers substantial benefits for many types of businesses that import a considerable amount of goods. The FTZ program helps businesses to improve cash flow significantly, cut costs and gain a competitive advantage. Just ask industry leaders such as Intel, PETsMART, and Microchip about the proven advantages of operating in Phoenix's FTZ program!

Officially outside of U.S. Customs territory, the FTZ allows businesses to defer or eliminate duty on imported goods prior to actually entering the United States. Site specific FTZ's, called subzones, can be created for qualified businesses that wish to locate anywhere within the city. The business virtually becomes a point of entry to the United States.

Though similar to a bonded warehouse, the FTZ actually provides a greater amount of flexibility and benefits. For example, the FTZ allows businesses to manipulate goods prior to going through Customs. Businesses may also simply store imported goods on site for an unlimited amount of time, without a bond, until they leave the zone. Businesses only pay duty when the goods enter US Customs territory. Therefore, almost any business that imports a considerable amount of goods can benefit.

EXPAND Program assists Phoenix businesses in obtaining loans from eligible local financial institutions. EXPAND provides additional collateral, up to 50 percent of a loan amount in some cases. The amount of the collateral enhancement can range as high as $150,000. There is no ceiling on the loan amount. Loans can be for virtually any legitimate business purpose. Jobs creation or jobs preservation is an essential element of any request for EXPAND assistance. With EXPAND, the successful applicant/borrower is able to receive a loan and the lender is in a more secure collateral position.

Business Retention and Expansion Program conducts visitations and interviews of local businesses to gather industry specific information, inform them about city services and address business needs. The Business Retention and Expansion Program provides tactical and direct assistance to businesses that are expanding, in need of financial or management assistance and workforce development.   

Incentive Zone Locator allows business owners and investors to find out if a business or residence is located within a specific incentive area, such as an: Enterprise Zone, and Enterprise Community, a New Market Loan Program area, or a Foreign Trade Zone.  This tool can help the investor determine whether or not a particular location is eligible for the tax incentives offered within those areas

There are many programs offered by the City of Phoenix to assist businesses. More information on each of the programs mentioned above can be found by contacting the Phoenix Community and Economic Development Department at: www.phoenix.gov   As a business owner, it is in your best interest to be aware of these programs and take advantage of these programs when possible  These loan programs, free trade zone and the enterprise zone programs could have a significant impact on your company's bottom line.

Thank you for your continued interest in Pinnacle Consultants.  If you would rather not receive e:mails with news, updates and tips from the financial world, please click the following link paul@pinnacleconsultants.org


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Special Points of Interest

  • New Markets Loan Program offers below market rate financing for acquisition, rehabilitation, expansion or new construction of commercial real estate projects

  • Foreign Trade Zone (FTZ) offers substantial benefits for many types of businesses that import a considerable amount of goods. The FTZ program helps businesses to improve cash flow significantly, cut costs and gain a competitive advantage.

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Pinnacle Consultants L.L.P.

19332 N. 100th Way

Scottsdale, AZ 85255

P: 480 980-3977

F: 480 585-1920

Website:

www.pinnacleconsultants.org

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Contact Us:

paul@pinnacleconsultants.org

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