New Markets Tax Credits
for Technology Facilities

The NMTC for Technology Facilities program energizes brand-new ventures in distressed neighborhoods

The Technology Facilities New Markets Tax Credit program is a US federal government aid plan created to incentivize investment decisions into low-income neighborhoods, providing approximately 25% of plan prices in flexible, below market funding that is usually dismissed at the end of the 7-year compliance duration.

The Technology Facilities NMTC program promotes financial investments in distressed areas for economic revitalization

NMTC financiers make investment decisions in organizations known as Community Development Entities (CDEs) which subsequently offer financing to organizations in low-income areas. The aim of the plan is to spark desirable financial revitalization in these spots.

A CBO Financial Subsidiary, Community Development Funding, LLC was one of only 66 groups to earn NMTC allocation in Round 1 in 2003, and one of 62 teams to obtain an allowance in Round 2 - one of just 10 companies to receive both 1st and 2nd round allowances. Ever since, the CBO team has gone ahead to secure increased allotments for our own CDE, and assisted many different customers with setting up CDEs and effectively looking for a direct NMTC allocation award. NMTCs create rewards to tax credit investors, companies that require capital, and state and regional federal government and financial development authorities.

Insightful factors for New Markets Tax Credit programs for Technology Facilities

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Technology Facilities in a Troubled Region

A low-income neighborhood is a census section with a minimum of 20% hardship, or one that has a typical family earnings that is at or below 80% of the community's average household income.

Eligible Technology Facilities New Market Tax Credits Funding

Investments are made in the type of equity-like lending to businesses located in low-income census systems or ones that primarily serve or primarily employ low-income persons.

This funding usually is used as "gap financing" for the development of business, industrial and retail realty tasks (consisting of neighborhood centers).

Other NMTC projects might also include for-sale real estate designated for moderate-to-low-income families, sustainable technologies, and sustainable, environmentally friendly innovations running on a business scale.

Process to Access NMTC Programs for Technology Facilities?

There are two methods to gain access to the program. To fund a single project, you will need to obtain CDEs that currently have an allocation and have a financial investment method that complements your company model and geographic place.

If you have a relatively large project or a pipeline of jobs in requirement of funding, the finest alternative is to form a CDE and use directly for an allotment of NMTCs.

Some Requirements Have to Be Completed by the Investor to be Approved for Technology Facilities New Market Tax Credits?

The recipient must be a verified Active Low-Income Community Business (QALICB), which is an organization that meets the following criteria:

  • The entity is is a for profit corporation or not-for-profit), or a partnership
  • It actively carries out any service except residential rental, development, sale or licensing of intangibles, golf course, golf club, massage parlor, jacuzzi facility, suntan center, racetrack, off-sale liquor
  • Fewer than 5% of its properties consist of "collectibles" (e.g., antiques, fashion jewelry, white wine, etc).
  • Fewer than 5% of its assets include "financial home" (e.g., stocks, bonds, cash aside from sensible operating capital).
  • 40% of its tangible possessions lie in a low-income community.
  • 40% of worker services are conducted in a low-income community.

More Details Regarding Technology Facilities

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