For entrepreneurs in the frenzy of managing a startup, it can be easy to overlook the resources right under their noses. 

Stephanie Hartman, the director of Small Business Services for Louisiana Economic Development, and others at LED detailed what state programs may work best for people looking to build growing companies at a recent Nexus Louisiana Tech Park Academy.

“We cover the whole state, and we have a suite of services that are really designed to help support small businesses from pre-venture and early stage up to second-stage growth for businesses that are looking for new opportunities,” Hartman said.

The LED team focused on how the digital media tax credit, quality jobs rebate, guaranteed loans, and the angel investor tax credit programs can help early-stage entrepreneurs and small businesses. Explore these programs to jumpstart your business:

Attracting More Digital Media Companies to Louisiana

The Digital Interactive Media and Software Tax Credit helps innovative digital media and software development companies of all sizes gain a competitive edge. Here how the tax credit works:

• Provides a 25% tax credit on qualified payroll for in-state labor and 18% for qualified production expenditures.

• No cap and no minimum requirement.

• The tax credit can be applied to state income tax liability, and the state will refund any overages OR applicants can opt for 85% of the value earned as a rebate any time during the year.

The tax credit is open to all companies producing digital interactive media products or platforms in Louisiana. However, certain exclusions apply, such as static internet websites or software primarily designed for internal use. In addition, only work physically performed in Louisiana and only direct development equipment purchased through Louisiana businesses qualifies for the credit. 

“It is definitely one of the best in the nation when it comes to software development and video game development,” said Eric Burton, LED’s director of digital interactive media and software development, who runs the tax credit program.

Fostering Quality Jobs Throughout the State

The Louisiana Quality Jobs Rebate provides up to a 6% rebate on annual payroll expenses for up to 10 years and either a state sales or use tax rebate on capital expense or a 1.5% project facility expense rebate for qualifying expenses.

An employer may qualify for the rebate if it employs:

• 50 or fewer employees state-wide before the start date of the contract, an employer must create at least five new direct jobs with new direct job annual payroll of at least $225,000.

• 51 or more employees state-wide before the start date of the contract, an employer must create at least 15 new direct jobs with new direct job annual payroll of at least $675,000.

• These jobs must be full-time, (full-time employees — working 30 hours or greater per week).

• Provide a basic healthcare plan that complies with federally mandated healthcare requirements or, if no federally mandated healthcare requirements exist, shall be determined to have a value of at least one dollar and twenty-five cents per hour.

• Coverage must become effective no later than the first day of the month, 90 days after the date of hire.

The rebate has a minimum wage requirement. Employers must pay new hires at least $18 per hour for a 4% rebate or $21.66 per hour for the entire 6% rebate.

Providing a Backstop to Help Small Businesses Grow

The Small Business Loan and Guaranty Program offers capital accessibility for startups by providing loan guarantees to banks and other small business lenders. The program’s purpose is to help develop, expand, and retain Louisiana’s small businesses.

Under the program administered by LED through the Louisiana Economic Development Corporation, guarantees may range up to 75% of the loan amount, not to exceed $1.5 million, and the guarantee fee may be waived based on the risk of the loan. Here are some of the basics of the loan guarantee program:

• Loan amount: $5,000 to $1.5 million

• Maximum guarantee: 75% of loan amount

• Minimum equity requirement: 15% to 20%

• Application fee: $0

• Turnaround time: Typically 7-10 days

• Guarantee fee: 1% to 4% of the guaranteed amount

Building a Stronger Investor Community for Louisiana

The Angel Investor Tax Credit encourages accredited investors to invest in early-stage, small wealth-creating Louisiana businesses that seek startup and expansion capital. Accredited investors must have a net worth with a spouse exceeding $1 million at the time of the investment or individual income exceeding $200,000 or joint income with a spouse exceeding $300,000.

The program provides a 25% tax credit on investments by accredited investors who invest in businesses certified by LED as Louisiana Entrepreneurial Businesses (LEB) and an enhanced tax credit of 35% on investments by accredited investors in LEBs located in qualified Opportunity Zones.

Angel investors can invest $720,000 per business per year and $1.44 million per business over the life of the program. It has a $3.6 million annual program cap. 

“The process can seem a little complicated the first time around, but it does get easier,” said Marissa Dion, who runs the angel investor tax credit program.