Four Ways Marlborough’s Financial Incentives Can Help Grow Your Business

Economic development organizations seek to attract businesses to their city, and both newcomers and existing businesses can enjoy impressive gains from their courtship and support.

The Marlborough Economic Development Corp in Marlborough, MA, for example, not only helps new businesses in the area get off the ground, but it also supports existing ones as they expand. Through its Economic Development Toolbox, MEDC helps businesses save on rent, raise the capital needed to open and operate, receive tax reimbursements and have their exterior renovation costs subsidized. With these tools—which were launched late last year—MEDC hopes to not only add to the life sciences, advanced manufacturing and high-tech industries that make up the bustling MA city’s booming economy, but also boost property values, employment and the tax base.

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Many small businesses face a final financial gap between the amount they have raised through traditional loans and the amount they need to begin, sustain or expand operations.

MEDC has recently launched a revolving loan fund program—the product of a partnership between the organization and four local banks—to help local businesses cross the funding finishing line. Owners can borrow from the fund to raise capital, acquire new property or restore existing ones, upgrade inventory, and many other uses. The “revolving” part of the loan fund comes when the fund is replenished through repayment and reused by future borrowers. Mass Signal Service owner Justin Sheridan attributes the existence of his business, an electrical engineering services company, to the fund, as it helped him purchase his first bucket truck (“pretty much my business on wheels.”)

“Mass Signal Service LLC would not be possible were it not for the staff at MEDC and everyone that contributed,” he says.

Since the loan fund's launch in January, the MEDC has more than 60 applications out to entrepreneurs and local businesses. To qualify, you must be able to present collateral, proof that the business is in Marlborough, a business plan and a credit review.

Taxes have once again topped the National Federation of Independent Businesses’ small businesses’ monthly survey as the Single Most Important Business Problem. And little wonder: the US tax code is by far the most complex in the world, owing to numerous special provisions and tax breaks that can overwhelm or be easily missed. Smaller businesses looking to ease their tax burden can turn to local governing bodies and EDCs, which frequently entice local businesses to their communities with a number of tax incentives, breaks or refunds.

MEDC offers a semi-annual property tax reimbursement for Marlborough-based businesses, which requires proof of necessity, stability and a multi-year lease. Credits will only be awarded once the business has officially opened shop and shown that it has completed the required tax payment.

Rent, naturally, is one of the biggest costs of doing business, especially for a fledgling company. Many small businesses tend to overpay for their space, either because they get a space that’s too big; they’re not familiar with some of the hidden fees of a lease, such as construction supervision and sublease approval; or they don’t factor in operating and maintenance expenses. And when profit margins can mean the difference between success and failure, anything that cuts into them as much as hefty rent needs to be controlled.

With its Rental Assistance Program, MEDC offers grants to qualified applicants looking to open a business in the new Marlborough Village District—a 50-acre mixed-use district created by the City of Marlborough in 2014 to foster new development in the downtown area. To qualify for Marlborough’s rental assistance program, a business must show that it couldn’t operate without the extra help, yet still has the ability to be profitable over the long term. The business must also enter into a multi-year lease in the Village District, where commercial rents are already affordable, hovering around $12/SF to $16/SF.

A renovated exterior can have an enormous impact on your business. The American Research Group (ARG) found "57% of a store’s brand identity is based on how the storefront looks, and that a customer will decide whether or not to buy something at a store within seven seconds of walking through the front door." Another survey found more than two-thirds of consumers have avoided a business purely on the basis of its outside appearance.

Overhauling a façade can be prohibitively expensive for a small business. The owner is either unable to shell out for the improvements or unwilling to take on a financial risk that may not produce a serious return. Fortunately, the interests of the community and local businesses are again closely aligned here, as a more upscale-looking environment brings more consumers, business, and greater property values. Marlborough’s storefront beautification assistance program can make large exterior renovation projects feasible for small businesses by reimbursing as much as half the total renovation cost, with a maximum of $5k. To qualify, applicants must own the property, or have a letter of authorization for beautification from the property owner. They must also have all the property’s permits.