Business Services

What is the New Market Tax Credits program?

The New Market Tax Credit Program (NMTC Program) aims to break the cycle of disinvestment in low-income communities by attracting the private investment necessary to reinvigorate struggling local economies. The NMTC Program attracts private capital into qualifying low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years. The CDEs responsibility is to then deploy the equity generated by individual and corporate investors into qualifying low-income community business’s (QALICBs).

How do I know if an area is “qualifying”?

Normally, projects seeking a New Market Tax Credits need to be located in eligible areas. Eligibility of a site may be determined by entering the address at the following website: CDFI Mapping Tool

What are eligible uses of the New Market Tax Credit?

NMTC proceeds may be used for business purposes, including but not limited to the following:

• Business acquisitions, construction, conversion, expansion, repair, modernization and development
• Purchase of equipment, machinery, and supplies
• Startup costs and working capital

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What is the State Historic Tax Credit program?

The State Historic Tax Credit program is an opportunity to capitalize on investments through government subsidies that allow taxpayers to receive financial relief when investing into historic properties. The state tax credits can be combined with federal tax credits to further incentivize investments and make previously not obtainable opportunities a possibility. States are allowed to dictate their own credit rates as opposed to the federal rate, which is set at 20%. This rate is typically greater than that of its federal counterpart. Properties that serve as qualified historic buildings are eligible to carry over credits given the determined rate, which provides a more lucrative position from the investor standpoint.

How do I know if a property is deemed as historic?

Buildings that are historic will be registered through the National Register for Historic Properties. For properties that are of potential historic registration, but are yet to be qualified, can apply for designation via a three-part application process.

How are credits captured?

If applicable, the investor is allowed to claim these credits towards their taxable income. Credits received through these investments are also eligible for sale to other entities that are incurring taxable income. The credits can be sold for cents on the dollar (the current rate being about $0.87).

How TPDC can help with this program...

TPDC serves as a facilitator for these opportunities by partnering with our affiliates through conducting legal work, originating loans, negotiating with local governments, and other factors that would otherwise serve as roadblocks to the opportunity.

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What is the Federal Historic Tax Credit Program?

This program incentivises private-sector investments into historic properties with the intent of reuse or rehabilitation. Projects that qualify are eligible for a 20 percent claim on all qualifying restoration expenditures. The federal tax credits are also able to be combined with state tax credits to increase the amount of credits claimed on income tax. Historic buildings will be registered with the National Register of Historic Places and thus constitute as eligible for tax credits. To receive HTC, the property must have gone through a three-part application process for historic preservation certification.

How else can tax credits be realized?

If developers of HTC projects do not wish to utilize the credits for internal use, they are able to sell their credits to third-parties to raise equity and reduce the amount of debt needed per the related project. These third parties are commonly entities such as national banks and federal savings associations.

How TPDC can help with this program…

TPDC serves as a facilitator for these opportunities by partnering with our affiliates through conducting legal work, originating loans, negotiating with local governments, and other factors that would otherwise serve as roadblocks to the opportunity.

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What is the Investment Tax Credit Program?

This program centralizes around investing in solar energy. It does so by providing a 30 percent tax credit to investments on residential and commercial use of solar energy. This credit is allowed to be claimed on income taxes and reduce dollar for dollar.

How can TPDC assist?

TPDC has a strong pipeline of affiliates that provides the resources to perform these investments through providing equity, consulting, legal work, and more.

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What is an Opportunity Zone (OZ)?

Opportunity zones are designed to spur economic development by providing tax benefits to investors in qualifying Census Tracts. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026.   If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain.  If held for more than 7 years, the 10% becomes 15%.  Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

How can TPDC assist in OZs?

TPDC has an extensive pipeline of affiliates which can perform essential tasks for OZ investments. This includes, but is not limited to, legal work, debt/financing, consultation, and packaging. Working with TPDC allows projects to receive proper resources and attention to provide the best results possible.

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What is the B&I program?

The Business and Industry (B&I) Guaranteed Loan Program is a loan guarantee program designed to assist credit-worthy rural businesses obtain needed credit for most any legal business purpose. The intent is to save and create jobs in rural America. How are you different from SBA? The SBA 7(a) and B&I Guaranteed Loan programs are similar in that a loan guarantee is provided, but the programs operate independently. The B&I program is specifically targeted to rural businesses. Rural Development has an extensive field structure of State and Area Offices that work closely with lenders in processing and servicing B&I loans. The lender and borrower work with a specific loan specialist in their State throughout the entire loan process. Other differences include a different fee structure and loan limits.

What are the benefits to the borrower?

Borrowers can benefit from better pricing and terms with the B&I loan guarantee in place than are typically given with conventional loans. The loans must be fully amortized, without calls or balloon repayment structures. Longer terms can reduce additional loan fees that may be incurred in the future on shorter term loans or balloon loans. The interest rates for the loans are negotiated between the lender and the applicant and may be either fixed or variable (or a combination of fixed and variable).

How do I know if an area is “rural”?

Normally, projects seeking a B&I guaranteed loan need to be located in eligible rural areas, which include all areas other than cities or towns larger than 50,000 people and the contiguous and adjacent urbanized area of such cities or towns. Cooperative organizations and local foods projects may be funded in both rural and urban areas in certain circumstances. Eligibility of a site may be determined by entering the address at the following website: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

What are eligible uses of loan funds?

Loan proceeds may be used for essentially any business purposes, including but not limited to the following:

• Business acquisitions, construction, conversion, expansion, repair, modernization and development
• Purchase of equipment, machinery, and supplies
• Startup costs and working capital
• Projects supported by New Markets Tax Credits
• Debt refinancing under certain conditions

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What is the USDA Community Facilities Program?

This program provides direct loans and grants for essential community facilities. These loans and grants allow communities to attract and maintain businesses so that there are public services available to offer and employment opportunities for the community members. This financing opportunity benefits the quality of life in rural America.

What are the targeted areas for the program?

• Healthcare
• Public facilities
• Community support services
• Public Safety Services
• Educational Services
• Utility Services
• Local Food Systems

TPDC has a strong pipeline of affiliates that provides the resources to perform these investments through providing equity, consulting, legal work, and more.

How TPDC helps…

At TPDC, we package and obtain these loans for your community facility investment and provide professional consultation throughout the proces. TPDC will also aid in application for the finanincing and other legal matters regarding the funding of the project.
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TPDC’s affiliate, TransPecos Banks, provides an exceptional platform to fund projects and provide financial advice to aid in the success of investments. The finances are provided at competitive rates, various terms, and are easy to apply for.

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What is a SBA Loan?

The Small Business Administration (SBA) works with lenders to provide loans to small business by setting guidelines for loans to be made. SBA loans reduce risk and make capital easier to access for both the lender and business.

How TPDC helps…

TPDC’s affiliate, TransPecos Banks, provides an exceptional platform to fund projects and provide financial advice to aid in the success of investments. The finances are provided at competitive rates, various terms, and are easy to apply for.

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