Information for Investors Information for Business Owners About NMTC Frequently Asked Questions

Investors - Impact Seven's NMTC Program
Social Investing that Pays

Why Work With Impact Seven?

Experience: We have been in the business of soundly utilizing investor funds to develop businesses and communities since 1970.
Expertise: Our key management has been with the firm for the bulk of its history.
Track Record: We have invested millions in Wisconsin businesses over our history, with - even as an alternative lender - a portfolio loss rate lower than the average for traditional lenders.
Relationships: For three decades, we have worked closely with business and civic leaders in Wisconsin communities to help them tangibly move forward.
Integrity: We are fully committed to our stakeholders - the people and communities of Wisconsin - and our investors.

Terms of the Tax Credits:

Impact Seven will use its anticipated allocations to attract qualified equity investments (an equity investment in a CDE that is exchanged for cash and substantially used to make qualified low-income community investments) from individual or corporate taxpayers.  

The term of the credit is seven years.  Investors will be able to claim a tax credit of 5% for each of the first three years of the credit and 6% for each of the last four years for a total credit of 39% over seven years.  The net present value of the credit is estimated at 30% over the seven years.  NMTC investments are considered "patient capital" because repayment on equity to investors cannot occur until after the seven year credit period.

Investment Example:

The following is an example of a how a NMTC investment might be structured and produce a healthy return to the investor:

u> Capitalize CDE with $5 million equity investment
u> Issuance costs of $150,000
> Annual administration of $20,000
u> Loan to qualified business assumed to be 7.5% over seven years
u> Tax rate assumed to be 40%
u> After-tax Internal Rate of Return of 7.3% vs. 3.9% without NMTC

The above example is only an illustration and is in no way intended to represent actual results from the NMTC investment.  The full potential of the utilization of the NMTC can be further explained by attending one of our workshops, contacting us for further discussion and/or a personal presentation.

Use of the Invested Funds:

Impact Seven will invest at least 85% of the qualified equity investments it receives in business expansion/start-up and real estate development projects in eligible census tracts (based on poverty level and median income) throughout Wisconsin.  Impact Seven will focus on using program proceeds to make quality loans and equity investments in Wisconsin businesses with growth potential.  Impact Seven will also engage in technical assistance provision and the purchase of loans made by other CDEs to a limited extent.  You provide the capital, Impact Seven will find the deals.  Or tell us about the projects you have in mind, and we will work together to make it happen.

Our Partners:

Impact Seven has partnered with powerful accounting, law, and finance firms to ensure the best returns and lowest investment risk possible.  Please feel free to browse their websites to learn more about our partners.

Virchow, Krause & Company, LLP - accounting and consulting firm.
 
Established in 1931, Virchow Krause was one of the first accounting firms in the Midwest. They began offering consulting services in response to clients who wanted them, as their most valued advisor, to play a broader role in the success of their business. Their areas of expertise now extend far beyond traditional auditing and accounting to include business services such as general consulting, operational efficiency consulting, information technology, employee benefits as well as personal services such as financial and estate planning.
 
Foley & Lardner - Business law and consulting firm

Foley & Lardner is one of America's top law firms, with offices across the United States, experience with clients around the world, and a team of nearly 1,000 attorneys prepared to work for you. Another 1,500 personnel provide support ranging from research to supplying first-hand industry and business trend knowledge.

 

 

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