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COVID-19 Economic Response and Recovery

Retool Incentives to Support Small Businesses


Small businesses are being disproportionately impacted by this crisis and often do not qualify for incentive programs, due to minimum requirements on investment and jobs created. By opening incentive programs to smaller firms, cities can support local businesses through the recession and advance other policy goals (e.g. workforce, equity, living wage, etc.).

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COVID-19 Economic Response and Recovery

Redesign your Business Attraction, Expansion and Retention Incentives

During an economic downturn, you should consider refocusing the financial incentives that were used to recruit new businesses, such as tax breaks, attractive loan financing and grants, to support retention and expansion of existing businesses.

Examples of US Financial Incentives Include:

  • Industrial development bonds
  • HUD CDBG revolving capital fund
  • EDA loans
  • Revolving capital fund
  • SBA 504 loans
  • Restoration tax abatement
  • Business retention and modernization tax credits (e.g. payroll, sales/use, investment, clean energy)
  • FastStart/on the job/incumbent worker training program

Source: Georgia Institute of Technology, 2010

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Business Retention Strategies

COVID-19 Economic Response and Recovery

Implement incentives to help low-income and minority communities


Cities should retool existing and/or develop new business incentives to advance equitable economic growth. Incentives should be structured to successfully attract and retain good jobs while requiring employers to develop local talent, particularly for low-income residents and people of color.


  • Attracts businesses and talent to local community
    Leverages employers to invest in low income and people of color and connect them to good jobs.


  • Lost tax revenue for the city
  • Companies may threaten to leave and/or not commit to the community unless they receive incentives

Impact: Medium
Implementation time: Slow
Cost: Low. Your city will need FTE to implement the program and monitor progress.

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