Private investors are abuzz about a proposed program that would entice insurers to invest in Louisiana entrepreneurs and small businesses by offering them $200 million in tax credits. It’s called the Louisiana Entrepreneurial Assistance and Development Program, or LEAD, and is outlined in House Bill 732 by Rep. Hunter Greene, a Baton Rouge Republican. The legislation calls for “venture and expansion capital” and stipulates that applications would be reviewed beginning in February 2010 by the state’s Office of Financial Institutions. Additionally, “applications shall be approved on a first-come, first-served basis.”
W. Anthony Toups III, senior vice president of Advantage Capital Partners in New Orleans, says the price tag might come as a shock, especially as the state is facing a $1.3 billion budget shortfall that’s expected to intensify in coming years. But Toups says LEAD could be revenue-neutral or even a moneymaker—other investment incentives will be coming off the books as the credits are applied, the private investments will generate other tax dollars and the legislation allows the state to participate in profits under certain circumstances.
LEAD could be a stimulus of sorts for private investors and entrepreneurs, Toups says. “Louisiana is already at a disadvantage for attracting venture capitalists and the economy has only made the situation worse,” he says. “Louisiana also has angel investors willing to gamble on good investments and, on the other side, big banks willing to sometimes make loans. But there’s a gap in between and that’s where the state can help.”—Jeremy Alford
