MEASURE TO IMPROVE ACCESS TO CAPITAL FOR MAINE BUSINESSES RECEIVES STRONG PUBLIC AND BIPARTISAN SUPPORT

Senator Valentino sponsors a bill to strengthen the Maine Seed Capital Tax Credit Program

AUGUSTA – Senator Linda Valentino (D-Saco) is sponsoring a bill that would help Maine businesses secure financing by extending and improving the successful Maine Seed Capital Tax Credit Program.

“This is a critical time for Maine’s economy,” said Senator Valentino. “We hear time and again that many Maine startups owe their success to the early financing that was possible because of this program.”

The Maine Seed Capital Tax Credit Program provides tax credits to private equity investors who invest in eligible Maine businesses. In the past year, $4.67 million was invested in a dozen Maine companies and since the creation of the program, 128 Maine companies have received capital.

“Extending the program will support more small businesses, which are crucial to strengthening our economy and creating new jobs,” said Senator Valentino.

Senator Valentino’s measure would extend the program by instating an annual, rather than lifetime, cap on credits, and by increasing the annual sales limit from $3 million to $5 million. It would also require eligible businesses to certify that investment is necessary to create and/or retain Maine jobs.

During the public hearing, Beth Bordowitz, CEO of the Finance Authority of Maine (FAME), said “we welcome support for this successful program.” Bordowitz cited the program’s success in helping to create more than 2,000 jobs and retain more than 5,000 jobs in Maine.

Supporters of the measure, in addition to FAME, including the Maine Department of Economic and Community Development (DECD) and many individuals familiar with the startup process, testified in support of the measure for more than 90 minutes at today’s public hearing.

Doug Ray, legislative liaison for the DECD, told the Taxation Committee, “Gaining access to capital is a significant obstacle for businesses both big and small. The Governor’s Account Executives within DECD hear this message constantly when they travel the state. Many businesses need programs like this in order to prosper.”

Access to venture capital has historically been difficult for Maine entrepreneurs. Maine lags far behind other New England states and the nation in average annual venture capital investment per capita, with only one-third the average annual investment per capita of Vermont and about one-ninth the annual investment in neighboring New Hampshire.

“This bill will support new and innovative businesses as well as traditional Maine industries,” said Senator Valentino.

There will be a work session on the measure, LD 743, “An Act To Extend and Improve the Maine Seed Capital Tax Credit Program” later in the legislative session.

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