Explained: Colorado’s Rural Jump-Start Program
Colorado’s Rural Jump-Start Program Incentivizes Rural Startups
In Colorado, there are a million reasons to set up shop in a rural community–lifestyle and access to our famed outdoors being high among them. Many entrepreneurs are also pleasantly surprised to discover more affordable commercial properties, lower costs of living, and a motivated, energetic labor market.
There are challenges, too, of course. Shipping and transportation costs can be more expensive. Supporting businesses and networks are often located in different cities. And, investors and banks sometimes have the perception that rural-based businesses are riskier than urban-based businesses. All things considered, urban companies have a few advantages.
The Rural Jump-Start Program was established to help rural Colorado communities increase their competitive edge for attracting new businesses by providing tax incentives, grants, and job creation benefits to rural entrepreneurs.
Rural Jump-Start is an economic development program overseen by the Colorado Office of Economic Development and International Trade (OEDIT). State government, local governments, higher education organizations, and economic development organizations (EDOs) collaborate to designate economically-distressed areas in rural Colorado, then work with new businesses to either launch or relocate to those areas.
The Benefits to Businesses
Eligible businesses can receive significant funding for setting up shop in some of the most beautiful and eclectic communities in Colorado.
For perspective: In 2023, Rural Jump-Start awarded $334,500 in grant dollars to nine new businesses. Among the 31 designated Rural Jump-Start businesses (2023), a total of $155,047 in tax credits were made available, and nearly $8.2 million in new hire salaries were exempted from individual state income tax.
Bottom line: There’s significant money on the table for new and relocating businesses in rural Colorado.
On this page, we’ll provide a simple overview of the Rural Jumpstart Program, including: eligibility, requirements, and how to apply for the grants and incentives.
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Overview of the Rural Jump-Start Program and Benefits
Goals: The Colorado Rural Jump-Start Program aims to incentivize diverse, economic development in rural and/or economically distressed areas of the state through supporting new businesses, job creation, and encouraging exports (of goods, services, and tourism).
Methods: It works toward this objective by providing tax benefits, grants, and new hire incentives to businesses that are either newly established or relocating to designated areas.
Incentives Available to Eligible Businesses
Tax benefits include:*
- State income tax relief
- State sales and use tax relief
- County personal property tax relief
- Municipal personal property tax relief (in participating municipalities); and
- State income tax relief for qualified new hires.
Operating Grants (dependent on location)
- Rural Jump-Start Zones: Matching grants up to $20,000
- Tier 1 Just Transition Communities: Matching grants up to $40,000
New Hire Grants (dependent on location)
- Rural Jump-Start Zones: Up to $2,500 per new hire employee
- Tier 1 Just Transition Communities: Up to $5,000 per new hire employee
*Note that businesses receiving Rural Jump-Start tax credits may not claim other Colorado tax incentives for new business establishment or new job creation/new hires.
Process Overview
Businesses submit one application for acceptance into the program. Once approved as a “Rural Jump-Start Business,” the business then must submit an annual report in order to collect the tax benefits and may submit a request for reimbursement in order to collect the grant money.
Rural Jump-Start Incentives, Explained
Incentives in the Rural Jump-Start Program are not dispersed immediately. And they only apply for taxes and costs incurred after a business is confirmed as a participant. Here’s how they work.
► Tax Credits
Tax credit benefits are received as a tax reimbursement. Each year in February, Rural Jump-Start businesses submit an annual performance report, with information relevant to the program like: number of employees and new hires, sales distribution/geography, product updates, and continued support of the region’s economic objectives.
The annual reports are first approved by OEDIT, then by the Colorado Economic Development Commission (CEDC). Businesses and qualified individuals receive a tax certificate to file with their taxes.
► Grants
The Rural Jump-Start program offers two types of grants: operating and new hire.
Operating grants will reimburse 3:1 (25%) of standard operating expenses incurred from the date the business is accepted into the Program, up to $20,000 (and up to $40,000 in Tier 1 communities). To maximize the operating grant, a business would need to spend and provide proof of payment for expenses up to $80,000 (or up to $160,0000 in a Tier 1 community).
Since businesses are reimbursed for expenses already incurred and paid for, these are technically “matching” grants. You cannot request grant money for future expenses.
Procedurally, businesses submit requests for reimbursement via a line item spreadsheet, accompanied by proof of payment(s). Valid operating expenses include, but aren’t limited to: rent, supplies, salaries, marketing, utilities, etc. OEDIT reviews every item. If approved, a payment is sent to the company.
New hire grants are distributed after OEDIT approves the company’s annual report in February. To remain compliant with the Rural Jump-Start Program, businesses must hire one full-time new hire in the first calendar year of operation; three full-time new hires in the second calendar year; and five or more full-time new hires in the following years.
Businesses can request new hire grants for the entirety of their time in the program, up to the amount approved by the CEDC. However, grant money is only distributed one time per individual new hire.
Success Story: “We wouldn’t be where we are today without Colorado’s investment in us,” says Jonathan Ballesteros, founder and CEO of Geyser Systems. Motivated in part by the Rural Jump-Start Program, he relocated his company from Austin, Texas, to Montrose. “The OEDIT team has been an outstanding group to work with,” said Ballesteros. “The fact that there’s an entire office in the state government dedicated to supporting entrepreneurs like me proves Colorado wants smaller businesses to thrive. It makes me proud to be here.”
Location Eligibility: Rural Jump-Start Zones and Tier 1 Just Communities
Rural Jump-Start benefits are only available to businesses that will be located in a designated Rural Jump-Start Zone or Tier 1 Just Transition Community.
What are Rural Jump-Start Zones and Tier 1 Just Transition Communities?
Rural Jump-Start Zones are recognized by the State as economically-challenged or distressed areas, with populations under 250,000. They may be smaller than, but no larger than an entire county. To earn designation, these regions must meet at least three requirements of economic distress, which include, but are not limited to: below average per capita and/or countywide personal income, higher than average unemployment, workforce age emigration, above average number of students that qualify for free lunch at school, and current designation as an Enterprise Zone.
► Current Rural Jump-Start Zones: Alamosa, Archuleta, Clear Creek, Costilla, Conejos, Delta, Dolores, Fremont, Garfield, Huerfano, Kiowa, Kit Carson, Lake, Las Animas, Lincoln, Logan, Mesa, Moffat, Montezuma, Montrose, Morgan, Otero, Phillips, Prowers, Pueblo, Rio Blanco, Rio Grande, Routt, San Juan, Sedgwick, and Yuma Counties.
► Qualified areas that have not yet applied for Rural Jump-Start Zone designation: Baca, Bent, Cheyenne, Crowley, Custer, Hinsdale, Jackson, Mineral, Saguache, and Washington Counties.
Tier 1 Just Transition Communities meet all the requirements of Rural Jump-Start Zones, with the added qualifier that the region must also be transitioning or diversifying from a coal-based economy. Compared to those in Rural Jump-Start Zones, businesses located in Tier 1 Just Transition Communities are eligible for twice the operational grant money (up to $40,000), and twice the amount in new hire grants (up to $5,000 per hire).
► Current Tier 1 Just Transition Communities: Moffat, Morgan, Pueblo, Rio Blanco, and Routt Counties, and Western Montrose County.
Is Your Business Eligible for the Rural Jump-Start Program?
Once you’ve confirmed your business is located in a designated Rural Jump-Start Zone or Tier 1 Just Community, other eligibility requirements apply. Businesses:
- Can be newly established in the State of Colorado, or planning to relocate to rural Colorado at the time of application. Some early-stage business development is acceptable, even including some income-generating activities (around funding primarily).Technically, the program states that a business cannot be operating in the State, which is ambiguous and possibly misleading for early-stage companies. Definitely contact OEDIT to confirm your business’ eligibility.
- Must not be a direct competitor to a similar business already operating in the Rural Jump-Start Zone or adjacent county.
- Must export goods, services or tourism outside of the county in which it will operate.
- Must attain confirmation from a sponsoring entity (a local government, an economic development agency, a public college, etc.) that the business’ plans align with the region’s economic goals.
- Must commit to the new hire requirements listed above.
- Must verify that the new hires will be paid at or above the county’s annual average wage, and work a minimum of 35 hours/week, among other stipulations.
Success Story: In 2021, Cold Case Gear became the first business in Archuleta County to participate in the Rural Jump-Start Program. Founder and CEO, Jon Rosenberg, was laser-focused on bringing advanced manufacturing to Pagosa Springs. For his business, Rural Jump-Start was a pathway for building connections and attracting the talent to make that happen.
Pre-Application Prep Work and Sponsoring Entities
To be successful in the program, new businesses should realize it’s about collaborative community building and alignment with an area’s economic goals. While the benefits are substantial, navigating the Rural Jump-Start Program has some complexity. Luckily, the OEDIT team, the OEDIT dedicated program leader (see resources below), and a statewide network of “sponsoring entities” are tremendous resources.
What are sponsoring entities? The program encourages coordination with local governments, and requires entrepreneurs to coordinate plans with approved economic development organizations (current list is here) or an approved higher education institution. These are known as sponsoring entities.
A few examples of current sponsoring entities are: the Economic Development organizations in Routt County, Logan County and Sedgwick County. On the education side, there is Colorado Mesa University, Fort Lewis College, and Technical College of the Rockies, among others.
The sponsoring entities are crucial cogs in the process. These organizations help vet businesses for eligibility, help them navigate the application process, and frequently, provide additional training and support to the founders.
“The challenge is to create an economically diverse economy, so for the Rural Jump-Start program specifically, primary businesses are key for us,” said John Bristol, executive director of the Routt County Economic Development Partnership, an OEDIT-approved sponsoring entity. “By primary, I mean businesses that export goods and services out of the community and bring new dollars back in. But that’s not exclusive. We’re very eager to partner with most new startups, and to do what we can to help them be successful.”
"We’re very eager to partner with most new startups, and to do what we can to help them be successful.”
For the utmost efficiency, it’s advisable to do some advanced preparation before applying. After determining location and business eligibility, here’s some more prep work to move you closer to a successful application:
- Contact the Rural Jump-Start Program Director right off the bat! OEDIT wants to meet with businesses before they submit an application to help prevent extra work for small, rural Colorado businesses.
- Research which “partner/sponsor” entity (i.e. the economic development agency or the public college) submitted the Rural Jump-Start Zone application for the area. You’ll need to coordinate with this entity on your official application.
- Coordinate with the local (city, town) government and county government to understand regional economic opportunities and objectives.
- Find clarity around how your business aligns with the economic development goals of the community.
- Research average wages in the county.
- Research other businesses in the designated Jump-Start Zone (and adjacent counties) to confirm your business won’t be in direct competition with an existing business.
- Continue to seek other funding. Bear in mind that the operating grants are reimbursements for expenses you’ve already paid for (since admission to the program).
- Ensure your business plan includes: a growth projection and timeline for bringing in new hires, 3-year financial projections or pro-forma income statements, geographic sales distribution (in and out of Colorado), and profit/loss for past 3 years, if applicable.
- Call OEDIT with questions along the way. The office is an incredible resource for both concrete information, direction, and networking.
Success Story: Kass and Beth Kremer founded Sasquatch Campers, in Silverton, Colo., in 2021. Thanks to the Rural Jump-Start program, they had $20,000 in grant money within a few months of applying. That money helped them buy the equipment they needed to launch the company. Three years later, the business is growing, and they proudly employ five local Silverton residents. In a town of 713 people (give or take), Sasquatch Campers is definitely helping to secure a solid economy.
Application Preview: Colorado Rural Jump-Start Program
Once you have most of the prep work in place, applying for the Rural Jump-Start Program has three primary steps.
Reminders:
- OEDIT encourages all interested businesses to contact the Rural Jump-Start Program director early in the process, and definitely before applying.
- Allow for plenty of time.
- Remember you’ll need to collaborate with a sponsoring entity for the application.
- Allow for two months (approximately) for approval or denial.
Three Steps:
1. Coordinate with the sponsoring entity to write a “memo of understanding.” Sponsoring entities will help define what this means based on their criteria and OEDIT’s needs. The criteria by every sponsoring entity. Some require a connection with the local academic research; others require the business to lease space from the sponsoring entity.
- John Bristol, of Routt County Economic Partnership, explained that his organization focuses on developing long-term relationships. Business leaders are asked to join the regional entrepreneurship program, where they receive expert-level assistance in writing a business plan, crafting pitches, and creating financial projections.
2. Create an account in the OEDIT Salesforce portal. Allow several days for the account to be approved.
3. Once your account is approved, submit the application with the sponsoring entity. The application will ask for:
- A detailed business plan (details here),
- Articles of incorporation or organization, and
- A Statement of Good Standing from the Colorado Secretary of State.
For each application, OEDIT first ensures that an existing, similar business is not already operating in the intended Rural Jump-Start Zone or an adjacent county. This opens a one-month waiting period when existing businesses who believe they’re in competition can challenge an application. OEDIT reviews the challenges and determines if the application shall continue or be denied.
OEDIT-approved applications are then sent to the monthly CEDC meeting (held on the third Thursday of every month) for the final determination. If approved as a Rural Jump-Start business, your benefit opportunities begin on that date.
Remember that being approved as a “Rural Jump-Start Business” is the first step. To receive the benefits, the business must submit an annual report that determines the value of the tax benefits and may submit a request for reimbursement via the grant money.
Success Story: Robin Hall loves her hometown of Steamboat Springs. When her old job required her to move to the Front Range, she waved that job good-bye and co-founded Town Hall, a sustainable clothing brand for kids. A commitment to place was one driving motivator, and a reason Town Hall is a successful Rural Jump-Start business.
Congratulations, Your Business is Approved to Receive Rural Jump-Start Benefits! Now what.
First, use the added capital and tax incentives to build a strong foundation and grow your dream! Second, stay compliant. In order to continue receiving Rural Jump-Start benefits, businesses simply need to submit their annual report on-time and continue to meet the new hire requirements, including numbers of new hires and wage requirements.
OEDIT issues reminders and a 60-day grace period to businesses that don’t file their annual report on time. If the report is not filed by the end of the grace period, benefits are suspended for that year. Even so, with clear communication, the business can work with OEDIT to get back on track and eligible for benefits the following year.
If the business is unresponsive during the 60-day grace period, OEDIT may make a recommendation for the CEDC to remove that business from the program.
Conclusion
The Colorado Rural Jump-Start Program is an exceptional opportunity for new and relocating businesses to earn cash grants and tax incentives by choosing to set up shop in rural areas of the state.
The program was recently reauthorized by the State and will continue grant funding July 2025. Tax incentives will be available through January 2031. The requisite collaboration with local governments and sponsoring entities inevitably will serve to build a stronger coalition of small business economic influence in the state.
The OEDIT team is a wealth of help and information. Be sure to thoroughly review the entire Rural Jump-Start Program overview on the OEDIT website, and contact Morgan Vankat, Rural Jump-Start and Skill Advance Program Manager, with specific questions.
Additional Resources:
- Colorado Office of Economic Development and International Trade (OEDIT)
- OEDIT Rural Jumpstart Program
- OEDIT Business Funding and Incentives Division
- SUCO Funding Database
- SUCO Grants and Opportunities
- SUCO Rural Colorado Startup Funding Overview