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Culp Provides Insights on CNBC’s “5 Ways States Are Luring Small Business”

Posted 2:23 PM by

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In a recent CNBC articleKatie Culp, president of KSM Location Advisors (KSMLA), offered insight into the current national incentives climate and why some states are more attractive for businesses than others.

Culp’s current role at KSMLA, as well as her previous role as head of a national location and advisory practice, has afforded an understanding of the unique nature of real estate transactions for companies wishing to locate or expand their business. Culp’s insights are backed by her experience securing $400 million in economic incentives for 16 million-plus square feet of office and industrial space for clients of all sizes in all 48 contiguous states.

In the article, Culp points out that states may be using attractive incentives to offset some potentially negative state attributes, such as a poor infrastructure. She also cautions about the “too good to be true” caveat, where a state will offer substantial incentives but, after careful review of the details, will show stipulations that prevent realization of the full benefits.  

Some packages offered in South Carolina and Tennessee "look tremendous," said Culp, "but when you dig into the details, there are a lot of caveats that limit the companies' ability to take full advantage of some of those programs."

The article goes on to outline five factors that make states attractive to businesses of all sizes:

  • States with vibrant college towns present multiple benefits by providing a strong university network and an attractive environment that encourages talented graduates to stay in the area as they begin a career.
  • States with abundant financing opportunities, such as vendor capital investors, small-business lending and Access to Capital.
  • Low tax burdens and a favorable tax climate are often strategic ploys to attract start-up companies as well as corporate relocations.
  • Smaller companies are often attracted to states that actively support local business and encourage their consumers to “shop local.”
  • States with easy and varied modes of transportation and an up-to-date transportation infrastructure ranked high on the list, including a first place nod to Indiana for its well-maintained roads and bridges, strategic ports on Lake Michigan and a top-notch international airport in Indianapolis.

The incentives tactic is simply part of good economics – states try very hard to be among the top competitors when companies are searching for a home. However, it is important to thoroughly review any incentives and balance them against potential drawbacks.  

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