Recently, The U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) announced more than $3.5 billion in New Markets Tax Credit awards. No Community Development Entities (CDEs) from Nevada received any allocation this year. Last year, the City of Las Vegas received $28 million from the federal program.
“Even though no Nevada CDEs received allocation, that doesn’t mean Nevada won’t benefit,” said Mike Ballard president of Ballard Consulting. “Nevada-based businesses are targeted for funding because historically, Nevada businesses have received so little of this type of funding.
“Under the federal program, companies can secure 20 to 33 percent of a project cost up to $30 million in interest-only, subordinated debt,” said Ballard. “The interest rates on most of these deals are less than three percent.”
In the 15 years that the federal NMTC has been in existence, it has helped create nearly 600,000 new jobs nationwide. It is primarily for manufacturing and distribution companies, technology firms, schools, medical and dental groups, etc.
In the last twelve months, several area businesses recently received an economic boost thanks to the 2014 State of Nevada New Markets Tax Credit program. The awards, funded by the Nevada Community Development Financial Institutions Fund, helps Community Development Entities stimulate business investments and growth.
This was the first year for the state program, which gave a combined $200 million in tax credits to seven CDEs in Nevada. A federal program established in 2000 has given grants across the nation totaling more than 36 billion.
"More than 20 local organizations received state, federal or both state and federal NMTC financing," Ballard said. "Some of them receiving Tax Credit financing in the last year include LasVegas.net, Access Health Dental, Shelby Automotive, Lake Mead Christian Academy, Orderwithme and Superior Linen."
Ballard is currently working on new NMTC projects in the manufacturing, facility management and education fields.
"The New Markets Tax Credit program is great," LasVegas.net owner Marty Mizrahi said. "We secured significant funding so we could continue to invest in our community. As a result we added 15 jobs in less than a year."
“Over its 15 year history, the New Markets Tax Credit program has successfully fostered competition for private sector investment into low-income communities that lack access to the capital needed to support and grow businesses, create jobs and sustain healthy local economies,” said Annie Donovan, the Director of the U.S. Treasury’s CDFI Fund, in a news release. “The investments made possible by today’s awards will have significant impact nationwide."
Since last July, Ballard Consulting (ballardconsulting.net) has provided administrative support for four projects totaling almost $40 million that include more than $13 million in New Markets Tax Credits. Ballard Consulting is a business development consulting firm that provides team building and counseling that helps ignite growth. Ballard can be reached at 702-467-0789.