FREDERICTON (GNB) – The province’s 16,000 small businesses will have better access to new investment capital thanks to improvements to the Small Business Investor Tax Credit tabled today in the legislative assembly.

The program encourages residents, and now New Brunswick corporations, trusts and holding companies, to invest in businesses in the province.

“Potential investors have told us that they would like to see the credit more widely available to encourage greater investment,” said Economic Development Minister Bruce Fitch. “Some individuals have their capital invested in professional corporations, trusts and holding companies. The tax credit will now be available to these investors, which will translate into more support for small businesses in the province.”

The Small Business Investor Tax Credit helps provide access to equity financing for small businesses. The number of applications for this tax credit grew to 100 in 2012 from six in 2003, when the credit was created.

The change to the tax credit expands the definition of eligible investor to include corporations and trusts. Corporations and trusts would be eligible for a 15 per cent non-refundable tax credit which would be applied against their provincial corporate income tax. They would need to invest a minimum of $50,000 and a maximum of $500,000 in an arms-length business. The maximum tax credit would be $75,000.

The tax credit is intended to help small businesses overcome difficulties in obtaining financing and lessen the reliance on debt financing.
 
“We are opening up a new pool of capital for small businesses,” said Fitch. “One of the key challenges facing our small businesses is access to capital while they are growing their sales.”

The program provides a 30-per-cent non-refundable personal income tax credit of up to $75,000 per year to eligible individual New Brunswick investors of at least 19 years of age who invest in eligible small businesses in the province. The credit is applied against provincial personal income tax otherwise payable. Investors are required to hold their shares for four years after the initial date of investment.

More information about the Small Business Investor Tax Credit Program is available online.
20-02-14


20-02-14