Atlanta Emerging Markets, Inc. (AEMI) offers flexible financing to businesses and real estate projects using federal New Markets Tax Credits (NMTC). Our NMTC program aims to attract private investment to Atlanta’s underserved neighborhoods and financially support catalytic projects that provide services or create quality jobs accessible to low-income residents.
Businesses or developers with projects located in Census designated low-income neighborhoods can apply for NMTC to finance the construction of new facilities, purchase equipment, or for operating expenses.
Total project costs must be $5 million or greater to be eligible for the NMTC program.
History
Established by Congress through the Community Renewal Tax Relief Act of 2000, the federal New Markets Tax Credits program has successfully used tax credits as a financial catalyst for private sector investment in low-income communities. AEMI’s NMTC program and has received $258,000,000 of allocation from the U.S. Department of the Treasury since 2007 and has deployed over $210,000,000 to eighteen projects in the City of Atlanta.
How it Works
AEMI is awarded federal NMTC allocation from the U.S. Department of the Treasury after a competitive application process. We then sell the tax credits to private investors, typically national banks, in exchange for equity capital to inject into a local project that demonstrates strong community impact.
The equity received from private investors, typically 20% of the total project cost, is then combined with the local developer’s capital stack and distributed to the project as a loan. The debt financing is typically structured as a 7-year interest only loan, with interest rates of 1-2%. However, at the end of the loan term the project sponsor is typically offered debt forgiveness on the portion provided by the private investor, which often results in about 20% of the loan not having to be repaid. This provides the developer/business a significant incentive after the 7 year loan term.
