Health Centers with Capital Project Plans Should Act Now!
The U.S. Department of the Treasury’s Community Development Financial Institutions Fund announced the awardees for the 2014 round of New Markets Tax Credit (NMTC) allocations. The awards, which total over $3.5 billion, are aimed at revitalizing low-income communities and increasing economic opportunity nationwide. The 76 Community Development Entities (CDEs) that received these awards are actively seeking projects to finance. This is great news for health centers, given that many CDEs are interested in providing financing for community health center expansion and renovation projects.
Capital Link is proud to announce that our lending affiliate, Community Health Center Capital Fund (Capital Fund), has been awarded a $25 million NMTC allocation. This opportunity will help us provide health centers with greater access to this funding option and allow us to streamline and accelerate the process for eligible projects.
While NMTC financing is a critical source of low-cost capital and equity for health center facility projects—often securing approximately 20-22% of total project costs—obtaining credits from a CDE with an allocation is a highly-competitive and complex process. Interested health centers must demonstrate a high level of project readiness and be able to communicate the merits of their projects to CDEs with allocation. Furthermore, the process of structuring and closing an NMTC transaction is complicated and the terms, benefits, and fees offered to borrowers vary widely.
Capital Link has extensive knowledge of the NMTC financing process and has strong connections with Capital Fund and other CDEs interested in working with health centers. To date, Capital Link has structured 43 NMTC transactions totaling $552 million for health center projects totaling $699 million. We’ve also assisted many health centers with combining NMTC financing with HRSA capital grants—an excellent option, especially for projects of $5 million or more. (Read some success stories here, here, and here on our website.)
For help in determining whether NMTC financing could be a good fit for your health center, please contact Mark Lurtz, Senior Director of Marketing and Project Consulting at firstname.lastname@example.org or 636-244-3082 or Mary Ann Wayne, Director of Loan Programs, Community Health Center Capital Fund at email@example.com or 617-988-2230.
To learn more about the NMTC program and how it works, click here to access our Spotlight on Capital Resources: New Markets Tax Credits publication and our recently released Spotlight on Capital Resources: New Markets Tax Credit Program Update.