Find the Right Funding for Your Business

Access to capital is vital to the start, growth and sustainability of small business. The good news is there are many options available for Kentucky’s small businesses.

Financing typically falls into two categories – debt or equity. Debt financing can range from conventional sources like banks, credit unions, micro-lenders and government backed guarantees to unconventional lending platforms, such as peer-to-peer lending and crowd-funding.

Equity options range from founder’s capital, family and friends, to private equity placement such as angel investors and venture capital. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are examples of government sponsored equity that take the form of a grant.

Kentucky offers a variety of programs to encourage new venture formation, business expansion and job creation. Supporting entrepreneurs helps the Commonwealth achieve long-term economic growth and employment for its citizens.


Small Business Funding - At a Glance

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  • Kentucky Small Business Credit Initiative
    Designed to generate jobs and increase the availability of credit by reducing the risks participating lenders assume when making loans to small businesses. Using three distinct credit enhancement programs, KSBCI will help lenders finance creditworthy small businesses that would typically fall just outside of their normal lending guidelines. Please click here for a listing of approved projects.
  • Kentucky Small Business Tax Credit
    The KSBTC program is designed to encourage small business growth and job creation by providing a nonrefundable tax credit to eligible businesses hiring one or more eligible individuals and investing at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit businesses with 50 or fewer full-time employees are considered eligible for this program. The KSBTC program is limited to allocating a total of $3 million in tax credits per state fiscal year.
  • Angel Investment Tax Credit
    The Kentucky Angel Investment Tax Credit offers tax credits of up to 50 percent of an investment in Kentucky small businesses. Prior to investment, both the investor and small business must submit applications for certification. Each investment must be certified in advance as well. Refer to the Kentucky Angel Investment Tax Credit Fact Sheet for program details and qualifying criteria.
    The Cabinet will match, on a competitive basis, Phase 1 and Phase 2 federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards received by Kentucky high-tech small businesses and those willing to become Kentucky-based businesses. This includes matching Phase 1 federal awards up to $150,000 to support the exploration of the technical merit or feasibility of an idea or technology, and up to $500,000 of federal Phase 2 awards, which support full-scale research and development.
  • Commonwealth Seed
    Commonwealth Seed Capital, LLC, (CSC) is an independent, non-profit fund that makes debt or equity investments in early-stage Kentucky business entities to facilitate the commercialization of innovative ideas and technologies.
  • KEDFA Small Business Loan
    The Small Business Loan Program is designed to help small businesses acquire funding needed to start or grow their small business. A small business must be engaged in manufacturing, agribusiness, or service and technology. Loan funds may be used to acquire land and buildings, purchase and install equipment, or for working capital. The minimum loan amount is $15,000 and the maximum is $100,000. The approved company must create one new full-time job within one year of the loan closing. KEDFA can fund up to 100 percent of the project costs and the loan can be used in conjunction with other lenders. The term of the loan can range from 3-10 years.
Kentucky Cabinet for Economic Development   Old Capitol Annex  300 West Broadway   Frankfort, KY 40601
502-564-7140 (local)   800-626-2930 (toll free)