PORTLAND, Maine — As lawmakers enabled a new fund to entice big business expansions, one of its leading proponents was working another smaller-money angle, too.
A bill that became law March 30 allows the Finance Authority of Maine to launch the Maine Capital Investment Fund, which can finance major business expansions after the fund amasses at least $50 million from investors.
While that bill made its way through the Legislature, Levesque also was working through a new investment fund focused on small companies to put together the first deal with an undisclosed company at the former U.S. Navy base, Brunswick Landing.
“We’re trying to recover an anemic Maine economy and you’ve got to try everything you can,” Steve Levesque, executive director of the Midcoast Regional Redevelopment Authority, said during a telephone interview while recruiting at an aviation trade show in Dallas.
That means investments large and small, he said.
“Not a lot of deals are a home run but you can get a lot of singles, and that adds up to a lot as well,” Levesque said.
The Windham Economic Development Co. and Midcoast Regional Redevelopment Authority are both partners in Micro Cap Investments Inc., a Portland-based firm investing in companies that can qualify investors for state tax credits through the Maine Seed Capital Tax Credit Program.
“There are small companies that really need the help and are benefitting from it,” said Jeffrey Tounge, who leads Micro Cap and also is a director at the investment firm Anania & Associates.
The tax credit program offers a pool of up to $5 million in credits every year to entice investments in certain Maine companies, including manufacturers, companies developing advanced technologies and companies that get 60 percent or more of their revenue from out of state.
For investors, the credit amounts to half of what they put in, paid out in as quickly as four years. For investors with Maine tax liability, there are limits on how much they can receive in each year while investors with no Maine tax liability can get a rebate, if invested through a qualified private venture fund, such as Micro Cap.
The fund will deal in convertible debt instruments, Tounge said, which means an investor could opt to turn their secured debt into equity in the company or seek return of their initial investment after a certain period.
Tounge said the fund’s directors are focused on bringing in-state and out-of-state investment to projects in Windham and Brunswick, but that they could look to other areas of the state.
For the big business program, Levesque said he hopes it might entice an Airbus or Boeing to find a home at Brunswick Landing, where he still has hangars to fill, but it also could support projects elsewhere.
“I think Maine has a really, really great opportunity to capitalize on our aviation assets with huge facilities in Bangor and Brunswick and Limestone and Sanford,” Levesque said.
That fund isn’t limited just to aviation businesses, but to business investments of at least $50 million that are expected to create or retain 250 jobs that pay at least 125 percent of the state average.
Levesque said the fund will primarily invest in debt from various companies at a level he said is beyond most Maine banks. But the first deal for that fund will take some time, as details of how the fund will operate still are undecided.
“There’s a long way to go,” Levesque said.
That includes raising the $50 million to support the fund that Levesque and proponents said shields taxpayers from investment risk as investments are backed not by the state, but by a company’s projected revenues or collateral.
The law also requires a company getting money from the fund to contribute the equivalent of 10 percent of its initial loan back into the fund, which also is allowed by law to get allocations from appropriations by the Legislature and state bond issues.
Levesque said he expects most of that money will come from institutional investors, endowment funds and pension funds.
Until FAME crafts rules around the program and raises that money, “it’s not really ready for primetime,” he said.
Levesque expects the smaller investment at Brunswick Landing to close next week.