UB Community Development (UBCD) is committed to economic and community development. As part of this commitment, UBCD uses New Markets Tax Credits (NMTC) loan and investment fund to bring the benefits of NMTC financing — low rates, seven-year terms and interest-only payment, higher loan to values— to community development projects that are typically too small to take advantage of the New Markets Tax Credit Program. Nationwide, more than $20 billion in private capital has been invested through the NMTC Program.
New Markets Tax Credit loan and investment funds are designed to be an innovative and creative way to assist companies with growth, expansion and improvement of operating cash flow. The establishment of these funds provides the benefit of tax credit funding to small businesses or non-profits that would typically not pursue the benefits of New Markets Tax Credits based on the size of their projects and associated costs.
Loan sizes range from $100,000 to $4,000,000. Using capital created from the sale of New Markets Tax Credits, borrowers receive up to 25 percent of their funds at zero interest as an economic development incentive. The creation of the fund gives UBCD and the project the advantage of funding smaller projects without additional costs.
Eligible projects include businesses and non-profits that operate in designated low-income communities (LICs) and meet specific gross income, tangible property and services performed criteria. Potential projects to be financed could include expansion of businesses such as manufacturers and grocery stores; businesses that develop or rehabilitate industrial, commercial, retail or mixed-use real estate in a low-income community; businesses that develop or rehabilitate community facilities such as health care centers; purchase or development of facilities for non-profit organizations; and businesses that rehabilitate for-sale housing units in LICs.