There's millions available.
Really.
MCDC now has the authority to sell $40 million in New Market Tax Credits.
What does this mean? MCDC now has a unique set of fiscal tools to stimulate
$40 million in new Montana projects, said Rosalie Cates, MCDC executive director.
“It works this way,” Cates explained. “We can sell 40 cents on the dollar of the total investment of a project. We sell those credits not to the developer but to national investors who buy tax credits to reduce their taxes. The investors give us the money and we structure it into a project to make the financing work.”
The beauty of tax credits is that it attracts investors to fund projects targeted for low-income areas that otherwise might not get the funding because of location and risk, Cates said. Often, tax credits end up being the critical piece of funding packages for entrepreneurs who have secured most, but not all, of the funding they need to start businesses.
This award couldn't come at a better time, said Evan Barrett, the governor's economic adviser.
The federal new market tax program began in 2000 to stimulate economic activity in economically distressed communities, but this is the first time an award has been given to a Montana organization.
“Any time you talk about economic development, the secret ingredient to making it all work is to bring money to the table,” Barrett said. “This award brings a new source of money to Montana, and it's not something that is easy to get.”
“It takes real effort to apply for these tax credits and it's a difficult process. I applaud any organization that is willing to stay with the effort until they succeed,” he said. “For MCDC, this is a great accomplishment. Once you get these kinds of things, you are in the door and it becomes easier to get more.
“Then, more and more doors open.”
The only catch? MCDC now has to find projects to fund - and fast.
MCDC's goal is to “get rid” of at least $20 million in tax credits by March and keep working toward the total
$40 million sum so the organization can compete for another round of tax credits in the next funding cycle.
To be eligible for the low-interest loans, projects must be worth $3.5 million or more, create jobs and make an honest effort to reach low-income people with their benefits. It is a plus if projects reduce environmental impacts while building, constructing and growing, Cates explained.
There's no telling how entrepreneurs will use this funding opportunity, but Cates imagines it will likely be invested in the bricks and mortar of a business - securing property or renovating buildings to accommodate new businesses.
“I'm excited to see what happens now,” Barrett said. “This is a project-driven thing at this point.”
Got a project? Need funding? Call MCDC at (406) 728-9234.
They are looking for you.
Reach reporter Betsy Cohen at (406) 523-5253 or by e-mail at bcohen@missoulian.com.
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Gigi wrote on Nov 3, 2008 8:04 AM: