New Markets Tax Credit Loan Program

Rockland Trust has consistently supported the growth of local communities through its lending activities. This commitment to community development is one of the reasons Rockland Trust was selected to receive awards under the U.S. Treasury’s New Markets Tax Credit (“NMTC”) program. These awards have strengthened Rockland Trust’s ability to provide essential community development financing.

What are the benefits to obtaining a NMTC commercial loan?

The NMTC program is designed to foster job creation and stimulate economic growth in low-income communities that are specifically designated by United States census tract. In order to achieve those purposes, Rockland Trust offers NMTC financing to qualified business borrowers at favorable interest rates and terms which are not generally available to all borrowers. Favorable terms and conditions for NMTC loans may include:

Below market interest rates, quoted on a case-by-case basis
Origination fees will be reduced
Longer than standard periods for interest-only loan payments
Longer than standard amortization periods
Reduced debt service coverage ratios

What businesses qualify for a NMTC loan?

A borrower must be located in a qualifying low-income community designated by United States census tracts. A Rockland Trust commercial banker can help you determine whether your business is located in a qualifying area.

A business borrower must also meet certain criteria:

A borrower formed solely to develop or own real estate in a qualifying low-income community, which does not own other real estate or have other significant assets, may qualify for a NMTC loan
A borrower formed to acquire owner-occupied commercial real estate, when both the landlord and tenant are related parties and qualified borrowers and the tenant is the primary occupant
A borrower may qualify if most (i.e., greater than 50%) of its employees and tangible property are located in a qualifying low-income community

Businesses NOT eligible for a NMTC loan include:

Apartment buildings
Golf courses or country clubs
Race tracks or other gambling facilities such as bars, restaurants, or convenience stores that sell lottery tickets or offer “Keno”
A store, such as a liquor store, the principal business of which is the sale of alcoholic beverages for consumption off premises (a restaurant that sells alcohol for consumption incidental to the sale of food may qualify)
Also, less than 5% of a potential borrower’s assets may consist of either “collectibles” (such as antiques not held for sale in the ordinary course of business) or “financial property” (such as assets including loan receivables)

What loan types are eligible?

Almost any type of loan is eligible under the NMTC program. NMTC loans, however, primarily fall into the following categories:

Loans for new construction and/or the substantial rehabilitation of commercial properties, including acquisition costs
Permanent “take-out” financing of new construction and/ or substantial rehabilitation, including acquisition costs
Loans for new construction and/or the substantial rehabilitation of homes or condominiums for sale (as opposed to loans for the construction of residential rental units, which do not qualify)
Loans to acquire owner-occupied commercial real estate, (when both the landlord and tenant are related parties and qualified borrowers) The loans can include new construction and/or substantial rehabilitation
Loans to acquire equipment or other assets Debt refinancing will not usually qualify for NMTC program requirements, except for: (i) permanent “take-out” refinancing of recently completed new construction and/or substantial rehabilitation; and, (ii) owner-occupied loans, when both landlord and tenant are related parties and qualified borrowers.

For more information about the NMTC program or to discuss other financing options for your business, please contact one of our experienced commercial bankers at any of our convenient commercial banking centers click here.