The Nevada Legislature has enacted for a second time New Markets Tax Credit (NMTC) program, providing some critical financing options to help local companies expand their businesses.
The NMTC program helps finance investments by providing state tax credits for a seven-year, below-market rate loan. Loans are primarily awarded to commercial, industrial and nonprofit-sponsored development projects in low-income communities and rural areas. For nearly 20 years, the NMTC program has helped stimulate economic growth in distressed communities by providing capital from private investors for which smaller companies would not normally have access.
The process to apply for New Markets Tax Credits does take time, so I encourage all companies looking for financing solutions to expand their businesses start the process as soon as possible.
The NMTP program is a flexible and efficient way to encourage investment in urban and rural areas that conventional lenders often avoid. Many of those areas have higher unemployment and poverty rates and are in need of economic development.
The federal program has been a proven success since its inception. It helped create nearly 600,000 jobs across the U.S. businesses that qualify to be in the program, and they can receive up to $16 million in capital, although it varies from project to project.
While the program is an excellent way to expand a business, not all who apply will qualify. NMTC is available for established companies, including manufacturers, fabrication companies, health care businesses, schools, training facilities, nonprofits, community centers and owner-occupied real estate businesses. Retail stores, rental real estate businesses, startups, casinos, massage parlors, golf courses, country clubs and others do not qualify.
Qualified businesses must be located in low-income communities or rural areas. There are many places that are considered low-income in Las Vegas and Henderson. So much so that some businesses might not know they are located in these areas.
Joe Gallagher is a principal in Ballard Consulting, a local firm that assists entrepreneurs with top-line growth, strategy implementation, securing hard-to-get equity or debt financing, or capturing needed government support. To learn more about applying to the NMTC program, call Ballard Consulting at 702-467-0789.