Financing Tools for N.C. Recycling Businesses
Recycling Business Development Grants
2017 Grant Round -- CLOSED
The Recycling Business Assistance Center (RBAC) offers small grants to North Carolina recycling businesses. Request for proposals are typically made once a year, depending on funding availability.
The purpose of this grant program is to reduce the flow of solid waste to disposal facilities and encourage the sustainable recovery of materials from North Carolina’s waste stream. To achieve that purpose, RBAC seeks viable, well-planned and effective proposals from recycling businesses in North Carolina wanting to start up or expand recovery efforts.
Projects involving the collection, processing or end use of materials in the solid waste stream are eligible for funding. Generally, the grant money is intended to fund sustainable investments in equipment and buildings necessary for increasing the capacity of a recycling business to divert more materials from disposal and into economic use. Grant money cannot be used to cover labor costs, general operational costs, or the cost of contract processing.
For more information, contact Wendy Worley at 919-707-8136.
**New Resource** RBAC Fact Sheet on Recycling Business Financing Options now available
A variety of loans may be available to recycling businesses. While RBAC does not lend money directly, it does provide information on a range of loan types and agencies available to recycling businesses.
Self-Help, North Carolina’s community development banking group, administers the Recycling Business Loan Component of its Environmental Business Loan Fund. The loan fund nurtures fledgling businesses until they become bankable and graduate to full-service private sector financing. Loans are structured as market-rate debt and can be used for working capital, inventory and equipment and real estate purchases. Loans have been made to companies that handle collection and processing of paper, scrap metal, construction and demolition debris, plastics and wood. Loan deals have ranged from $10,000 to more than $1 million (with an average loan size of $75,000) and have leveraged an additional $2 million. Contact Jane Hatley at 828-771-2817.
The Golden LEAF Loan Program at Self-Help provides loans to help small businesses in rural and tobacco-dependent counties in North Carolina. Eligible uses: Start-up capital, working capital, equipment and inventory purchases, refinancing predatory debt, acquisition, construction or renovation of facilities. Any business sector that creates high quality jobs will be considered. Priority is given to health care, construction trades, green industries, agriculture and manufacturing (including aerospace, biotechnology and defense contracting). For more information, contact Jane Hatley at 828-676-2196, ext. 3473.
North Carolina's Natural Capital Investment Fund targets recycling companies, particularly those focused on the sustainable use of natural resources. NCIF makes loans and investments in the $25,000 to $750,000 range. NCIF is an affiliate of The Conservation Fund. Businesses interested in NCIF funding should contact Rick Larson at 919-951-0113 or Anna Tefft at 336-734-6902.
Mountain BizWorks meets the needs of its clients through in-depth business planning courses, ongoing technical support and advanced training and small business loans up to $50,000. Since its founding in 1989, the organization has provided business planning training to more than 3,000 entrepreneurs, assisted in the creation of more than 1,000 locally-owned businesses and has loaned more than $2 Million.
Neuse River Development Authority’s subsidiary, Neuse River Development Ventures Inc., has been awarded a U.S. Department of Treasury CDFI Fund Technical Assistance Grant to be used to develop a strategic plan for lending and development services to serve small business borrowers in eastern North Carolina’s Low Income Communities. The NRDV Loan Fund will be a private sector, financial intermediary with community development investment as its primary mission. It will develop new lending products and developmental services that will offer a variety of features that meet the financial needs of entrepreneurs in low income and economically distressed communities.
Small Business Administration offers numerous loan programs to assist small businesses. Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements and debt refinancing (under special conditions). It is important to note, however, that SBA is primarily a guarantor of loans made by private and other institutions.
Recycling Tax Credits
North Carolina offers a tax exemption on equipment and facilities used exclusively for recycling and resource recovery. The N.C. Division of Waste Management manages the Tax Certification Program.
North Carolina law allows a sales and use tax incentive related to purchasing manufacturing equipment. This tax incentive allows a one-percent privilege tax rate on equipment purchases with a maximum tax of $80.00 per article. Therefore, rather than the usual seven percent sales tax, a one percent tax on equipment is charged per article. To qualify, the business must be in North Carolina, use purchased equipment for operational use, and most importantly, fall within the definition of “manufacturer.” The N.C. Department of Revenue relies on case law to define manufacturing. In general, manufacturing can be defined as changing the form of a commodity, or creating a new and more valuable commodity.
To take advantage of this tax incentive, N.C. DOR recommends that a company apply for a ruling regarding its status as a “manufacturer.” It’s a good idea to prepare an outline of the raw materials/ feedstock used, explain the process or treatment (materials are subjected to), describe the final product and intent for the final product. The relevant sales and use tax statutes and technical bulletins can be found on N.C. DOR’s Web site. Please contact the Sales & Use Tax Division of the N.C. DOR at 919-733-2151 for more information about this program.
Other Financing Sources for Recycling Businesses
In certain circumstances, RBAC partner agencies and other organizations may provide additional funding sources and information for recycling businesses.
The Department of Commerce publishes a variety of reports on the state’s economic development incentives, primarily for in-state stakeholders and legislators. In addition, the Commerce Finance Center offers information on the financial incentive programs available to qualifying companies that plan to locate or expand in North Carolina.
This publication from the Small Business and Technology Development Center serves as a resource for individuals seeking start-up financing, businesses hunting for expansion capital and organizations that aid small businesses in obtaining financing.
SJF Ventures is a venture capital fund that finances and assists rapidly-growing companies with more than $1 million in sales. SJF Ventures seeks new investment opportunities, particularly in the renewable energy and efficiency, green building, organic and premium products, business and health care services, and water and infrastructure sectors. Contact the SJF Durham Office at (919) 530-1177.