NEW MARKETS TAX CREDITS

NEW MARKETS TAX CREDITS

The New Markets Tax Credit (“NMTC”) Program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities.

Through the NMTC Program, the CDFI Fund allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs are financial intermediaries through which private capital flows from an investor to a qualified business located in a low-income community. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. Using the capital from these equity investments, CDEs can make loans and investments to businesses operating in low-income communities on better rates and terms and more flexible features than the market.

In exchange for Investing in CDEs, investors claim a tax credit worth 39% of NMTC allocation being provided to a given project. The Investor's tax credit is claimed over a seven-year period.

This is where we come in. Emerald Capital will assist from project inception through the end of the 7 year NMTC compliance period. We offer a multi-phased service that begins by understanding your project’s needs, whether it’s financing for a new building or funding for non-real estate needs such as equipment or working capital. Next, once we assess your project is a good fit for the NMTC program, we match your project with a Community Development Entity (“CDE”) interested in your type of project based on the location, activity and benefits delivered to the Low-Income Community. We excel at finding the right NMTC investor, for your given project, and who offers the best terms for your situation.

Emerald Capital also closes your NMTC financing alongside you and your legal counsel. Upon closing, we stay in contact to assist your project through the 7-year compliance period, as well as project managing reporting requirements and compliance reporting to CDEs and investors.

Additionally, Emerald Capital and its affiliates offer other services such as Architectural Design, General Contracting, Construction Monitoring, and other financing / incentive consulting services. 

Entering Keys

OBJECTIVE

  • Determine if your business/project would qualify for New Markets Tax Credits;

  • Socialize your project to potential Community Development Entities to obtain reservation letters to support an allocation of NMTCs and socialize your project to potential NMTC Investors to obtain equity investments, if applicable;

  • Assist in the closing of the NMTC Financing for your project; and

  • Assist in NMTC compliance monitoring of your project.

SERVICES

CDE & Investor Commitments

  • Determine eligibility for qualifying for New Markets Tax Credit Financing

  • Prepare NMTC Project Summaries that outline the project, sponsor’s background, qualifications for the NMTC program and community benefits delivered for NMTCs

  • Identify and socialize project to Community Development Entities and Investors that would be a fit for your project

  • Assembling Sources & Uses, Budgets, cash flow projections and other items needed by the accounting firms to provide the NMTC Financial Model/Projections.

  • Assist in completing all intake information requested by CDEs / Investors

  • Identifying and Securing Allocations from CDEs and Commitments from Tax Credit Investor that would be a fit for your given project

  • Conducting Financial benefit analysis of proposed NMTC Allocations

  • Negotiating terms from Investor and CDEs

  • Advising clients regarding advantageous NMTC Structures for their given situation

  • Assist you in reviewing the investment terms from CDE and Investor for the proposed project

 

NMTC Financing Closing

  • Assistance in leading the closing of your NMTC Financing.

  • Leading the coordination of conference calls

  • Assistance in Real Estate/Construction Due Diligence to close

  • Negotiating terms in tandem with you and your legal team

 

Construction Period Assistance

  • Assistance with the Construction Disbursements process through Construction Completion to help lead draw requests from QALICB disbursement accounts

 

Compliance Assistance

  • Assist you through the 7-year compliance period.

  • Preparing the NMTC QALICB Compliance Report for CDEs/Investors

  • Assistance in completing the annual Community Benefits Agreement

  • Assistance in monitoring the ongoing compliance requirements

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