Could a New Market Tax Credit Loan Work for Your Business?

Delving into the finer points of the federal government’s New Market Tax Credit (NMTC) program may not be your cup of tea. The good news is you don’t have to, with this brief overview of the program and its benefits.

First, click this link and input your business’ address to see if you are in a qualifying area –

New Market Tax Credit Map. If so, read on and a whole new world of affordable financing may await.

 

How does the program work?

In short, the NMTC program helps economically suffering communities attract private capital by providing investors a federal tax credit. Sources of capital that would not otherwise want to invest (or lend) in a community now have an attractive incentive, and businesses in that community benefit.

Historically, low-income communities have seen more vacant commercial properties, run down manufacturing facilities, and inadequate access to needed retail and service businesses. The NMTC program has a goal of reversing this trend and reinvigorating struggling local economies. Individual and corporate investors receive a tax credit against federal income tax obligations in exchange for making capital available through the program.

 

How does your business benefit?

While the details can be worked out with your accountant and lender, your business can benefit through project financing with better terms than with a traditional direct bank loan. Benefits can include lower rates, lower origination fees, higher loan-to-values, and longer maturities. From your vantage point though, financing is structured to look almost identical to a traditional business or real estate loan.

A wide range of uses can qualify. Recent examples of NMTC transactions include mixed use commercial real estate, manufacturing facilities, hotels, restaurants, nonprofit theatres, apartment buildings and even high-end shopping malls.

 

Where do I go to learn more?

If your business is in a qualifying geographic area, and you believe your project could qualify, we at Preferred Capital Funding would love to take this journey with you. Call us today at 770-648-8100, or email apps@4pcf.com and one of our loan specialists will be on the case.