Eager for Help: Small businesses may have to wait until May for incentives

Tax credits for group health-insurance costs.

Grants or low-interest loans for buying equipment and leasing office space.

New subsidies for new hires.

Triad small-business owners, entrepreneurs and their advocates are eager to provide wish lists for state incentives to Gov. Bev. Perdue.

However, they will probably have to wait until May before Perdue presents her plan to the General Assembly for promoting small-business growth.

Perdue announced plans Jan. 13 to target small businesses "that are born in North Carolina, create jobs in North Carolina and stay in North Carolina."

Chrissy Pearson, a spokeswoman for the governor, said that the plan is to help existing businesses and provide assistance for start-up companies through new initiatives and by tweaking existing incentives and tax credits. For example, incentives could be provided to franchisees if a tax credit is approved for hiring someone who is unemployed.

"Some of the proposals may require legislative approval," Pearson said. "Some of these incentives may not require a lot of money, and we realize we have to be creative in this economy."

The N.C. Commerce Department also is expanding an initiative called "Biz Boost" statewide. The program is aimed at helping small businesses "apply for credit, work on staffing, manage cash and reduce costs." Federal money will be used to pay for the program.

"Right now, businesses just aren't making much money, if at all. It's hard to justify a new hire if you can barely handle the ones you currently have," said David Phillips, the owner and one of two employees at Triad PR Store. The store, a public-relations franchisee, is at 682 Saint George Square Court off Hanes Mall Boulevard.

"If there were more people making the entrepreneurial leap, we would certainly benefit," Phillips said. Among Phillips' suggestions are tax credits or other incentives to businesses buying equipment, doing an upfit or hiring new employees.

"I think it should be a graduated credit -- the more you spend, the more credit your business will get," Phillips said. "It would seem that this would stimulate spending and have a trickledown effect to local restaurants, retail stores and other small businesses."

Jan Allison is hoping for a more consistent 2010 for her automotive-maintenance company, Carolina On-site Fleet Services at 817 N. Cherry St.

"We took somewhat of a beating in 2009," said Allison, who has owned the franchise since 2004. The company let go of one of its four technicians last year, and she said she used some of her own money to keep the company solvent.

"I would like to see a tax credit for using personal money to keep a business going during a recession," Allison said. "A tax credit to lower the cost of providing health insurance to employers would be wonderful."

Local economic officials are curious to see what kind of emphasis Perdue will put on life sciences given the burgeoning cluster of small businesses, particularly in Piedmont Triad Research Park. In November, Perdue used the Wake Forest Institute of Regenerative Medicine as the backdrop for announcing plans for the N.C. Innovation Council.

Anthony Atala, the director of the institute, is urging North Carolina to provide more grants for regenerative-medicine research. California and Massachusetts -- the only states ranked ahead of North Carolina in biotechnology -- offer billions just for stem-cell research.

As a result, even though the institute has more than 250 employees, Atala said he is constantly battling to keep from losing top researchers to companies in those states.

Atala said he supports tax credits for job creation and providing health insurance to employees, renting space or buying land, upgrading utilities, research and development, and to offset the payment of local property taxes.

"However, it is important to remember that many startup biotech companies don't immediately have revenues, so tax credits are not helpful to them," Atala said. "Instead, these companies could benefit from grants to buy equipment and hire scientists.

"Finding affordable manufacturing space is often a challenge for these companies as well. They could benefit if real-estate developers or municipalities were given tax credits to offer space at reduced rates for these companies during the startup phase."

Dan Grayson, the chief executive of VG Innovations Inc., said he prefers tax credits for every created position. The Winston-Salem company has developed a device that uses human bone about the size of a pencil eraser to limit motion of the affected spinal segment.

VG has added two employees in the past two years -- for a work force of five -- as its sales surged from $625,000 to $4 million related to 950 surgical procedures done with its device. Grayson said that the company could add up to 10 employees if it reaches its 2010 sales goal of $9 million.

"I also think that low-interest loans or a possible outright grant should be given to small companies that have real technology that could grow into something larger," Grayson said.

Tony Fanale, the owner of Basalt Specialty Products Inc. in Elkin, has seen his work force shrink from 29 to 17 since 2007. Basalt makes high-temperature insulation, which has lost business from industries affected by the recession, including appliance, automotive and marine manufacturers.

"I would like to see business-loan guarantees from the state differ from what the federal government provides, such as lower interest rates and longer terms," Fanale said. "I'd like to see the simplifying of state industrial revenue bonds that are now a very convoluted process to use."

The best incentive for Neville Chaney, the president of WJ Office City in Boone, would be tax credits for group health insurance for his 17 employees.

"Group health insurance is one of our largest expenses, sometimes rivaling employee costs and rent," Chaney said. "We're still trying to create jobs, but we're not a manufacturer, so building roads or adding water and sewer is not going to help us.

"If we can get state help in controlling our group health-insurance costs, we believe we can be a contributor to what the governor says she wants -- jobs, jobs, jobs."

rcraver@wsjournal.com


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