The New Markets Tax Credit (NMTC) program was designed to increase “access to capital” for businesses and real estate projects in low-income communities. The NMTC program provides tax credit investors with a federal tax credit for providing capital to qualified projects located in some of the most distressed communities in the country. The NMTC program benefits:

• Distressed Communities and Difficult to Finance Projects by providing the financing that “closes the gap” in capitalizing difficult to finance projects, enabling these projects to create jobs, provide critical infrastructure, and community facilities (see impact statistics below)

• Entrepreneurs/Project Sponsors by utilizing the tax credit investment to provide additional equity that is non-dilutive to the project sponsor.

• Leveraged Lender
In addition to the equity investment attracted, NMTC projects also typically involve debt financing through a “leverage lender”. Three Roots Capital, as a CDFI, brings value to the project as a potential leverage lender, working with our network of bank partners in a way that impacts the project’s cost of capital and access to capital.

• Tax Credit Investor
Three Roots Capital is also a Certified Community Development Entity (CDE). CDEs are the organizations qualified to apply for, and receive, annual allocations of the NMTC tax credits. CDEs sell these tax credits to private investors for investment into qualified projects. CDEs actively collaborate as a national network to identify projects for qualified investment. So, whether through a direct tax credit allocation, or through our network of peer CDEs, Three Roots can help projects attract NMTC investment.

• Between 2003 and 2015, $42 billion in direct NMTC investments were made in businesses and these NMTC investments leveraged nearly $80 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment.

• Between 2003 and 2015, the NMTC generated more than 1,000,000 jobs, at a cost to the federal government of less than $20,000 per job.

• By law, all NMTC investments must be made in economically distressed communities. However, more than 72 percent of all NMTC investments have been in communities exhibiting severe economic distress, including unemployment rates more than 1.5 times the national average, a poverty rate of 30 percent or more, or a median income at or below 60 percent of the area median
Source: NMTC Coalition

If you are interested in exploring a partnership with Three Roots Capital, we would love to meet you. Please reach out to us by contacting:

Dennis Corley
Business Development and
Community Relationships Manager
dennis@3rootscapital.org
(865) 220-1713