About this programme
The Maine Seed Capital Tax Credit Program encourages equity investment in Maine businesses, both directly and through private venture capital funds. The Finance Authority of Maine (FAME) can authorize a state income tax credit equal to 40% of the cash equity an investor puts into an eligible Maine business.
The money invested can be used for fixed assets, research, or working capital. The program works by making an investor's risk cheaper through the tax credit, rather than by FAME investing directly in the business.
How it works
An investor gets a tax credit equal to 40% of their cash equity investment. An individual investor may put up to $500,000 into a single business in any consecutive three-year period.
The aggregate investment limit per business, for which tax credit may be received, is $3,500,000.
Investments must stay at risk for five years. Returns such as dividends, royalties, interest, stock options or warrants are allowed, as long as they are not simply a return of principal before that period ends.
Credits must be taken in increments of 25% per year starting the year of investment. For investments not made through a private venture capital fund, credits used cannot exceed 50% of the investor's total tax due in a given year; unused credits carry forward for up to 15 years. Credits from private venture capital fund investments are refundable.
Under the special rules for private venture capital funds, investors can put up to $500,000 per business (including through a fund) in any three-year period, and no company can receive more than $3,500,000 lifetime or $2,000,000 annually that qualifies for credits (though it may receive more without credits). No fund can own more than 50% of a company or otherwise control it, and no fund member may be a principal owner. A business receiving fund investment must keep its operations in-state for four years afterward.
Businesses that receive credited investments must file annual reports with FAME covering other investments received, jobs and payroll, and in-state and total sales revenue. Failure to file makes a business ineligible and can trigger revocation of credits already issued.
Who can apply
The business must be located in Maine, with annual gross sales under $5,000,000.
The investor must own less than 50% of the business and may not otherwise control it, as FAME determines.
Principal owners of the business and their immediate relatives are not eligible to invest for the credit.
Running the business must be the full-time professional activity of at least one principal owner.
The business must also be a manufacturer, or derive 60% of sales from outside Maine while keeping most employees in-state, or develop or apply advanced technologies, or be a value-added natural resource enterprise, or be a certified visual media production company.
How to apply
- A business must apply for eligibility before it receives any investment for which a tax credit will be claimed, by completing the Business Application (businesses with more than 10 employees must also include the Employment Plan and supporting documents listed on page 2 of the application).
- An individual investor submits the Individual Investor Application with the supporting documents listed on page 2.
- A private venture capital fund submits the Private Venture Capital Fund Application with the supporting documents listed on page 2.
- Email the completed forms to mmackenzie@FAMEmaine.com, or mail them to the Finance Authority of Maine, PO Box 949, Augusta, ME 04332-0949.
Documents you’ll typically need
- Business Application (plus Employment Plan if over 10 employees)
- Individual Investor Application
- Private Venture Capital Fund Application
- Annual Report (for businesses that received credited investment)
Frequently asked
How big is the tax credit?
40% of the cash equity an investor puts into an eligible Maine business.
How much can one investor put in?
Up to $500,000 per business in any consecutive three-year period, with a $3,500,000 aggregate lifetime limit per business for credited investment.
Does the business have to apply before receiving the investment?
Yes. A business must apply for eligibility before it receives investments for which tax credits will be claimed.
What kind of business qualifies?
A Maine business under $5,000,000 in annual gross sales that is a manufacturer, an advanced-technology developer, a value-added natural resource enterprise, a certified visual media producer, or an exporter deriving 60% of sales from outside Maine while keeping most employees in-state.
Can the principal owner of the business claim the credit for their own investment?
No. Principal owners and their immediate relatives are not eligible investors under this program.
More funding in Maine
Business Innovation Funding
Maine Technology Institute · Maine
Maine tech and life-sciences startups can build up to $100,000 in matched innovation grants across three funding tiers.
CEI Business Loans
Coastal Enterprises Inc (CEI) · Maine
A Maine CDFI lends up to $1 million to local businesses for start-up costs, equipment, working capital, or expansion at 6 to 10 percent interest.
Commercial Loan Insurance
Finance Authority of Maine (FAME) · Maine
Maine lenders can get up to 90 percent of a business loan insured by the state, making banks more willing to say yes.
FAME Direct Loan
Finance Authority of Maine (FAME) · Maine
Maine businesses that cannot get financing elsewhere can borrow directly from the state, up to $1 million, at a capped 8 percent rate.
Wicked Fast Microloans
Coastal Enterprises Inc (CEI) · Maine
New Maine businesses can get a fast, low-paperwork microloan of up to $15,000 at a fixed 7.25 percent rate.
Maine Venture Fund Equity Investment
Maine Venture Fund · Maine
A Maine-focused venture fund invests directly in high-growth local companies, often alongside other investors.
Reviewed 2026-09-25. Programmes change, so check eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private firm and is not part of any government body.