Why would a business or agency want to do a NMTC transaction?
• Generally speaking businesses view the tax credit as a source of capital — either realized through utilization of the credit to offset future tax obligations or as an immediate cash infusion through the sale of the tax credit to an investor who can use the credit. Not-for-profit organizations realize the benefit of the credit by effectively selling the credit to an investor through a leveraged financial model – typically a banking institution. Not-for-profit organizations realistically can assume that 15-18% of the project’s cost can be offset by the benefit of the NMTC program.
