NMTC Allocation 2011

The Power of 21
By Frank Altman, President and CEO

New Markets Tax Credit (NMTC) loans are the funds that keep on giving.

For every $1 they receive in NMTC loans, business owners in low-income areas generally are able to bring in an additional $21 in private sector investments. Private investors are motivated to invest in these businesses because the NMTC program offers them tax credits worth more than 30 percent of the amount they invested.

1:21 ratio? Not bad.

We just learned that CRF was one of 99 organizations chosen from a pool of 250 applicants to receive $77 million in new NMTC funds. The $77 million allocation was the largest amount awarded to 2010 applicants (only three organizations received this amount). Since the program began in 2001, CRF has received $674.5 million in NMTC allocations, making us one of the nation’s largest NMTC designees.

Congress reauthorized NMTC as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. All told, the tax credits allocated last year came to $3.5 billion. Applicants had requested more than $25 billion, clearly demonstrating the appetite for investing in low-income communities throughout the U.S.

This new NMTC allocation will play a key role in driving capital to small businesses, who are the key drivers behind our economic recovery and job creation.

At a time when we’re all doing our best to find ways to extend a helping hand to low- and middle-income families and communities, this is truly news worth celebrating.