New Markets Tax Credits

At Pacesetter CDE, we bring capital to the country’s hardest to serve communities – places where conventional lenders often say “no.” We’ve deployed more than $211 million in flexible, below-market financing to projects that create lasting impact, from rural hospitals and tribally owned health centers to advanced manufacturing facilities and multi-service nonprofits.

The tool that makes this possible is the federal New Markets Tax Credit Program. Created by Congress in 2000, the NMTC Program incentivizes private investment in low-income communities by providing federal tax credits to investors. This infusion of capital helps finance projects that improve access to healthcare, education, job training, manufacturing, and other critical services catalyzing growth where it’s needed most.

As a for-profit Community Development Entity with a national service area, Pacesetter CDE uses its NMTC allocations to design financing that goes beyond the conventional market. Through our innovative leveraged structure, extended interest-only periods, high loan-to-value ratios, and flexible underwriting standards, we close funding gaps and ensure more resources stay in the community.

When a project that meets our mission is funded, the impact is measurable: a hospital reopens its doors, a health center doubles its patient capacity, a manufacturer brings hundreds of jobs to a rural town. This is the power of the NMTC Program in action, and it’s the opportunity we deliver to partners ready to invest in these outcomes and revitalize communities.

Quick Facts: New Markets Tax Credit Program

• Purpose: Unlock affordable capital for businesses and nonprofits in low-income communities, enabling projects that create jobs, expand services, and drive long-term economic growth.
• Scale: Since 2000, the NMTC Program has generated over $120 billion in total project investments nationwide.

• Financing Advantage: NMTC financing typically offers interest rates well below market, often 50–80% lower than conventional lenders.
• Flexible Terms: Borrowers may receive interest-only payment periods (often the full 7-year compliance period) and long amortization schedules after that, easing cash flow during critical growth years.
• High Loan-to-Value: NMTC loans can reach 100% or more loan-to-value, reducing the need for additional collateral and making projects possible without heavy equity requirements.
• Support for Complex Projects: Flexible underwriting standards allow financing for borrowers with limited operating history, unconventional business models, or projects in markets underserved by traditional banks.
• Eligible Uses: Funds can support construction, rehabilitation, equipment purchases, working capital, and other needs essential to launching or expanding operations.
• Impact Sectors: Frequently finances healthcare facilities, manufacturing plants, community service centers, educational facilities, and other projects that deliver measurable community benefits.

NMTC Financing at a Glance – For Borrowers
• Lower Monthly Costs: Interest rates far below market averages reduce payment burden from day one.
• Cash Flow Friendly: Interest-only payments for up to 7 years keep operating capital in your business when it’s needed most.
• Long-Term Stability: Loan amortization periods of 25–30 years after the initial term make repayment predictable and manageable.
• High Leverage Possible: Loan-to-value ratios at or above 100% mean less upfront equity required.
• Flexible Qualification: Projects with limited operating history, unconventional structures, or in distressed areas can still qualify.
• Broad Uses: Financing can cover construction, renovation, equipment, and even certain operational needs.
• Community Impact Focus: Priority given to projects that create quality jobs, expand critical services, and strengthen local economies.