NEW MARKETS TAX CREDIT · CDE & LEVERAGE LENDER SUPPORT
New Markets Tax Credit Feasibility Study
Independent analysis for NMTC transactions — whether the project stands on its own economics, and whether the community impact the allocation is justified by can actually be evidenced.
Statutory basis26 U.S.C. § 45D
Who relies on itCDEs · leverage lenders · investors
Core outputsViability, impact evidence, coverage
Typical pairingQALICB operating projections
Standard delivery10–15 business days
Fee basisFixed, never contingent
Why NMTC deals order a feasibility study
The New Markets Tax Credit is a statutory program under 26 U.S.C. § 45D, and the statute does not prescribe a feasibility study. The requirement comes from the parties: the Community Development Entity has to be satisfied the qualified active low-income community business will still be operating through the seven-year compliance period, the leverage lender is underwriting real debt, and the investor is buying credits whose recapture risk turns on the project surviving.
That is a harder question than a conventional credit. An NMTC project is often in a market a conventional lender has already declined, run by a sponsor without a long operating history, in a building that does not yet exist. The study's job is to say, on evidence, whether the operating business behind the structure is viable — because the tax structure does not make a weak operation strong, it only finances it.
What we analyse
The two halves of an NMTC analysis
- Project economics — market demand and capture, revenue build, cost basis, staffing, operating margins, and coverage through the compliance period with sensitivity on the assumptions that actually move it.
- Community impact evidence — the census-tract distress indicators the allocation rests on, jobs created and retained with the basis for each count, wage levels, accessible services, and the population the project actually reaches.
Impact claims are where NMTC narratives are weakest, because they are usually written as intentions. A job count with no staffing plan behind it, a service population with no catchment analysis, an accessibility claim with no transit or distance data — each is easy to assert and hard to defend at closing. We evidence them the same way we evidence revenue: with sources, methods and stated limits.
Written for the parties who have to sign
The report is structured so the CDE's investment committee, the leverage lender's credit committee and the investor's diligence team can each find what they need without reconciling three different documents. Projections are delivered as a fully linked model with no hard-coded outputs, so anyone underwriting the file can stress it themselves rather than taking our word for the result.
Our fee is fixed and quoted before we start. It is never contingent on a favourable conclusion or on the transaction closing — in a structure where several parties are relying on the same third-party analysis, a contingent fee is an unforced credibility problem.
Frequently asked questions
Is a feasibility study required for an NMTC transaction?
Not by statute. It is required in practice by the parties — the CDE, the leverage lender and the investor — whose exposure runs through a seven-year compliance period and who need an independent read on whether the operating business survives it.
What is a QALICB and why does its viability matter so much?
The qualified active low-income community business is the operating entity that receives the investment. If it fails during the compliance period, the transaction's tax benefits are at risk, which is why diligence focuses on the operation rather than the structure.
Can you evidence the community impact claims?
We evidence what the data supports: tract-level distress indicators, jobs with a staffing plan behind them, wages, and the population within a defined catchment. Where a claim cannot be supported, we say so rather than dressing an intention up as a finding.
Do you prepare the allocation application?
No. We prepare independent feasibility and market analysis that an applicant, CDE or lender can rely on. Allocation applications are prepared by the applicant and its advisors.
Can the same report serve a companion loan?
Usually. NMTC projects frequently stack with SBA, USDA or conventional debt, and we scope the study once to satisfy the strictest reviewer in the stack rather than producing two overlapping documents.
How long does it take?
Ten to fifteen business days from a complete data room is standard. Multi-tenant or mixed-use projects with several revenue lines can run longer.
Wert-Berater, Inc. · 1968 South Coast Hwy, Ste 2382, Laguna Beach, CA 92651 · 111 Town Square Pl Ste 1238 PMB 657834, Jersey City, NJ 07310 · 539 W. Commerce St #8486, Dallas, TX 75208 · 66 W Flagler Street, Suite 900, PMB 12704, Miami, FL 33130 · +1 310-857-2443 ext. 800 ·
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