HB 518 Summary

• Creates an Alabama Small Business Micro-Loan Program administered by the Alabama Innovation Corporation to provide loans up to $50,000 to eligible small businesses with a maximum 7-year maturity and interest rate not exceeding 9 percent.

• Establishes eligibility requirements for small businesses including: primary state management, at least 75 percent of employees as Alabama residents, no more than 50 full-time employees, and annual revenues not exceeding $500,000.

• Restricts micro-loan proceeds to specific business expenses including inventory, supplies, equipment, rent, utilities, employee payroll, and contracted services, while prohibiting use for personal investment recoupment, taxes, or debt repayment.

• Creates a micro-loan tax credit allowing Alabama taxpayers to claim credits for contributions to fund the program, with credits capped at $5,000,000 annually and usable against income taxes, financial institution excise tax, insurance premium tax, and state license taxes.

• Requires the Alabama Innovation Corporation to reserve at least 25 percent of tax credit funds for businesses meeting Section 40-18-376.4(c) qualifications and mandates borrowers receive business and financial education support.