The
U.S. Department of the Treasury’s Community Development Financial Institutions
Fund announced the awardees for the 2017
round of New Markets Tax Credit (NMTC) allocations. The $3.5 billion in awards
are aimed at revitalizing low-income communities and increasing economic
opportunity nationwide. Community Health Center Capital Fund (Capital Fund), Capital Link’s lending affiliate, was awarded a
$40 million NMTC allocation.
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 tax credits is a 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 Community Development Entities (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. Of the nearly $1 billion in financing obtained by health centers through the NMTC program, approximately 60% was raised with Capital Link and/or Capital Fund assistance. 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.
For help in determining whether NMTC financing could be a good fit for your health center, please contact us here.
