Why Incorporate in Illinois?

There are many reasons to not only incorporate but also develop a business in Illinois. It is the home of Chicago deep-dish pizza and then there's Wrigley Field. But that isn't the corporate-type information you were looking for, but it does all play into quality of life considerations when deciding where to incorporate. There are many corporate incentive loans and grants offered by and through the state that, in some cases, can dramatically reduce the costs of either relocation or starting a business.

Taxes

One of the crucial considerations in locating a business anywhere is taxes. Illinois is pretty friendly in this respect. Corporate income is taxed at 7.3 percent, which includes a 4.8 percent state income tax and a 2.5 percent personal property replacement tax. If you're a small company, S corporations pay 1.5 percent. Many of the rest of the tax breaks depend on your business. There is a half-percent tax credit for investing in mining, manufacturing or retailing; an additional half-percent if employment increases more than 1 percent; and an additional half-percent investment tax credit plus a $500 jobs tax credit in Illinois Enterprise Zones. And there are no local corporate taxes.

Department of Commerce and Economic Development

There are a host of grant and loan programs available through the Department of Commerce and Economic Development. The Community Service Block Grant (CSBG) Loan Program involves several agencies. It is administered jointly by the Illinois Department of Commerce and Economic Opportunity, statewide Community Action Agencies and Illinois Ventures for Community Action. The program offers long-term, fixed-rate financing to new or expanding small businesses. A requirement, however, is that the business create jobs for low-income employees. CSBG loans are available for between 20 and 49 percent of the entire project cost and offers interest rates of between 5 and 7.5 percent.

Unconventional Loans

The Illinois Capital Access Program (CAP) encourages loans to small and new businesses that may not qualify under conventional loan requirements. It basically backs up conventional lender loans should you default, making it easier to get some kind of conventional loan for your business. Think of the CAP program as a guarantor of your loan or co-signer. However, be prepared to have a solid business plan and creditable company officers to get the CAP to back you up on your project.

The Enterprise Zone Participation Loan Program

The Enterprise Zone Participation Loan Program (EZ/PLP) is a variation of the conventional PLP program, except it targets specific areas that are economically depressed. Basically, it subordinates loans through participating lending institutions; but the EZ/PLP may be able to offer small businesses located in an enterprise zone a more attractive loan rate than otherwise available.

Shipping

Chicago grew to become, well, Chigago, partly because of its geographic location as a shipping center. Odd, because it's in the middle of the country, but it provides access to the St. Lawrence Seaway. If your business is shipping related, it's a good location. To facilitate further development of shipping-based companies, the Port Commerce and Economic Development Opportunity Department has created a Port District Revolving Loan program. It offers loans within port districts to better utilize the inland and intermodal facilities. It offers up to $3 million in loans annually. They are competitive loans so, again, a solid business plan is needed that is integrated with the goals of the development department.

Other Programs

The government has established numerous programs to foster business growth throughout the state.The state offers rural microloans because, after all, it is a largely agrarian state. And a number of other loans are federally mandated that need local sponsorship to qualify for things like historic tax credits.
The best starting point is usually on the local level, depending on where you may want to be located. Your local congressman or state legislator's office are good places to turn to. They will not only point you to grant and loan programs, but they likely know of specific locations that may suit your needs. And if it's a project in an area that has a significant impact, they will often become an ally in helping to see the project to completion.

References

• Building Costs in Illinois
• Loan Programs
• Form an Illinois Corporation