New Markets Tax Credits (NMTC)
What are New Markets Tax Credits (NMTC)?
Congress created the New Markets Tax Credit (NMTC) program, part of the Community Renewal Tax Relief Act of 2000, to encourage investment in low-income communities. The program is designed to generate $Billions of dollars in new private sector investments into low-income communities. This is an exciting program that provides tax incentives to investors to make investments in low-income communities or areas of economic stress in order to promote economic improvements through the development of successful business in these communities.
In 2011 the State of Oregon passed HB 817, which was designed to leverage a modest investment of State funding to spur significant private job creation and rehabilitation in underserved communities.
How can the NMTC Program Help a Community?
A proven, cost-effective tool, NMTCs support job creation and encourage small businesses to expand. NMTCs are a new tool for economic development, developers to enjoy subsidized rates on debt or receive additional tax credit equity and investors fulfill Community Reinvestment Act (CRA) objectives and diversify their investment portfolio with commercial and mixed-use real estate. Since its inception, the program has had a measurable impact:
- The New Markets Tax Credit Coalition estimates $36 billion in capital has already been invested thanks to the credit.
- Using the Recovery Act standard of one job for every $92,000 in financing, investments create more than 390,000 jobs in low-income communities.
NMTC projects have ranged from an elementary school in Portland, OR, to a domestic violence shelter in Harlem NY, to a retail shopping center in Cleveland, OH. In each case, NMTC allocations have helped facilitate the completion of a vital local project that otherwise would not have moved forward. Through the program, NMTCs bridge financing gaps and provide a cushion against cash flow obstacles as projects reach stabilized operations.
New Market Tax Credit Assistance
State NMTC Program (SB 817)
BizCapital BIDCO is a private capital non-bank lender specializing in small business loans in selected states across the US. Our capital is funded through the New Market Tax Credit Program and we utilize the SBA 7a, SBA 504, and USDA loan programs. We specialize in in turn around deals, will do start-ups, construction and under collateralized projects, and provide our capital at below market rates. We have created a fund utilizing credits from the recently passed Oregon Low Income Community Jobs Initiative legislation and are actively looking for projects to do. Our capital can be used for real estate, equipment, inventory and working capital purposes, and we target small businesses located in Low Income Census Tracts. Our credit underwriting is very flexible and we look at each business individually, offering loan amounts from $500k-$4M. We bring loan solutions with more flexible terms than banks that allow businesses to grow and prosper. Due to lack of collateral or lack of historical cash flow, BizCapital can be a great alternative when traditional lenders cannot meet your needs.
Looking for businesses in
- High Technology
- Forest Products
- Metals, Machinery, and Transportation Equipment
- Agriculture and Food Products
- Clean Technology, or anything in Industrial or Manufacturing
The City of Beaverton is actively pursuing development opportunities to use New Market Tax Credits as an additional tool for non-profits, businesses, developers and financiers who can demonstrate community impact in low-income sections or areas of economic stress. For more information, contact the Economic Development Division at 503-526-2456.
To qualify for NMTCs, your project must be located within qualified census tracts:
- Beaverton Map
- NMTC Mapping Tool - Novogradac and Company
- Fact Sheet - More information on the State of Oregon NMTC Program
Information & Resources:
- NMTC 2012 Progress Report
- Beaverton NMTC Workshop
- Novogradac and Company Website