REI New Markets Investment, LLC
Community Development Financial Institutions (CDFIs)
Cherokee Nation Businesses
New Markets Redevelopment, LLC (NMR)
BOKF Community Development Fund, LLC
MetaFund’s broad mission as a non-profit, well-capitalized Community Development Financial Institution (CDFI) is the facilitation, development, and financing of Oklahoma businesses and community development projects. MetaFund has 22 investors, including 20 Oklahoma banks, and has more than 100 non-profit and government-related partners. Banks receive Community Reinvestment Act credit for investments and loans in, to, and through the corporation.
MetaFund also is a Collaborative Community Development Merchant Banking Venture Capital Financial Institution (CCDMBVCFI) and an Oklahoma non-profit 501©(3) corporation with $10 million in capital.
MetaFund makes loans and investments in financially viable projects and companies that provide jobs, housing, or other direct benefits to underserved people or distressed places throughout Oklahoma.
Although MetaFund usually partners with banks, it can use investment and venture capital structures that banks cannot use by themselves, such as convertible debt, convertible preferred stock, direct equity investments, and revenue sharing (royalty) agreements. Included in MetaFund’s loan/investment portfolio are infill housing, numerous small businesses, and several start-up companies.
In addition to its $10 million in capital, MetaFund has received a $54 million New Markets Tax Credits (NMTC) allocation, which is available to banks and other tax credit investors. The NMTC program is designed to provide financial capital to areas of significant economic distress. Census tracts having a poverty rate greater than 20% and/or a median family income of less than 80% of the area’s median family income, qualify for the 39% credit, which can be claimed for qualifying loans or investments in eligible census tracts. MetaFund can also facilitate the 20-30% Oklahoma Small Business Tax Credits, which in some cases may be combined with the NMTC. Tax credit investors must make an equity investment in MetaFund’s LLC subsidiary, which then lends or invests the capital into the qualifying businesses.
MetaFund is able to invest in both start-ups as well as entities in a more mature life cycle phase. Businesses and projects must, however, be both financially viable, and meet MetaFund’s mission qualification of providing benefit to underserved demographies or geographies.
Generally, a complete business plan, including both past financial performance and future projections, is required for review. Prospective applicants may contact the MetaFund officials below.
A. Thomas Loy, Chairman and CEO, firstname.lastname@example.org
Michael W. Harlan, President, email@example.comMetaFund
The New Markets Tax Credit Program enacted by Congress in 2000 is a powerful tool to meet the challenge of economic development in low-income rural and urban communities. The program is administered by REI New Markets Investment, LLC, a subsidiary of Rural Enterprises of Oklahoma, Inc., which is a Community Development Financial Institution of the U.S. Treasury Department and a Certified Development Company of the U.S. Small Business Administration.
Administered by the Treasury Department through its Community Development Financial Institutions Fund, the New Markets Tax Credit Program offers investors an attractive tax benefit through a 39% federal income tax credit for investments. The tax credit will be issued over a 7-year period, 5% for each of the first three years and 6% for each of the remaining four years. The tax credit may be carried forward. The net present value of the credit is estimated at 30%. The equity investment must remain in the LLC for the 7-year term. Interest or dividends paid by the business in which the investment was placed may be passed through to the investor during the term. Equity capital or loan principal repaid by the business during the 7-year term must be reinvested.
Qualified low-income community investments may include: loans, equity investments, or capital to qualified businesses. To qualify, businesses must derive at least 50% of their gross income from a Qualified Low-Income Community and a substantial portion of their tangible property and services performed by employees must be in an eligible community. These businesses may be start-ups, expansions of existing businesses, or mature businesses.
REI New Markets Investment, LLC will provide technical assistance to businesses receiving loans or investments under the New Markets program. It will also establish a compliance-monitoring program to ensure that businesses meet all the requirements of the Tax Credit.
REI also specializes in small business loans and packaging short and long term loans for new or existing businesses. REI works with lending programs providing business loans ranging from $1,500 to over $10 million. Loan proceeds may be used for land and buildings; new construction or renovation; equipment, inventory, furniture and fixtures; purchase of a business or working capital.
As a packager, REI works with the client and lending agency, acting as a liaison and assisting with additional information needed until the loan request is approved, loan closes and funds have been disbursed to borrower. As a lender, REI administers the business lending programs of the U.S. Small Business Administration and also has some of its own loan programs.
The U.S. Treasury Department’s CDFI Fund is a federal program created to expand the availability of credit, investment capital, and financial services in distressed urban and rural communities.
The CDFI Fund administers a competitive grant program that provides capital grants, equity investments, loans, and awards to fund technical assistance to CDFIs. CDFIs are mission-driven financial institutions that provide products and services to people and communities underserved by traditional financial institutions.
More than 1,000 CDFIs operate across the nation and have invested more than $10 billion since 1996. CDFIs can be banks, credit unions, loan funds, venture capital funds, community development corporations, or microenterprise loan funds.
Including the MetaFund Corporation and the REI New Markets Investment detailed above, Oklahoma has 14 CDFIs. Oklahoma CDFIs & Contact Information (Page 29; Source: CDFI Coalition)
Cherokee Nation Businesses LLC (CNB) is the economic engine of the Cherokee Nation, the nation’s second largest Indian tribe. CNB owns companies in the gaming, hospitality, personnel services, distribution, manufacturing, telecommunications and environmental services industries.
Cherokee Nation Businesses has been awarded $60 million in New Market Tax Credits, which can be used to encourage businesses to locate and expand operations in Northeastern Oklahoma. Cherokee Nation Businesses will offer the tax credits as incentives to companies who can bring jobs and economic opportunity to this region.
The $60 million in tax credits are the largest ever granted to a tribally affiliated organization and the second largest allocation of New Market Tax Credits in Oklahoma history.
More information about Cherokee Nation Businesses is available at www.cherokeenationbusinesses.com.
New Markets Redevelopment LLC (NMR) provides financing for real estate construction and redevelopment projects that positively affect the economic development of downtown and near-downtown Oklahoma City. NMR’s financing takes the form of low-interest rate loans and soft equity investments, which can save the borrower or property owner 25% or more of the amount of the financing over the seven-year term of the investment.
NMR’s low-cost financing is possible because of the federal New Markets Tax Credit program. Since it received its first allocation of New Markets Tax Credits (NMTC) in 2005, NMR has made $34 million of investments in downtown or near-downtown Oklahoma City.
To be eligible, a project must be located in a Low Income Community (map of eligible areas), and must be consistent with the city’s economic development priorities. Eligible projects may include office space, health care facilities, retail stores, mixed-use buildings, and community facilites. Project sponsors may be either for-profit or not-for-profit organizations.
The financing is available only to projects that would not happen without the low-cost financing provided by this program. Projects that make use of other forms of assistance, in the form of city, state, or federal funding, or foundation or donor support, are considered favorably by NMR. NMR will fund construction and redevelopment costs, but not property acquisition costs.
If your project might be eligible for New Markets Tax Credits (NMTC) financing, contact NMR to discuss your plans. If it looks like the project may qualify, NMR sets up an initial meeting to discuss the project and the program and investment products NMR offers. During this meeting, NMR also discusses non-NMTC financing options, other ideas that may help to advance the project timetable, and underwriting procedures that apply to NMR financing. Following the initial meeting and if NMTC financing looks like a viable option, NMR will ask you to pull together more detailed information about the project to make a formal application.
Charles E. Wiggin, firstname.lastname@example.orgNew Markets Redevelopment, LLC
BOKF Community Development Fund, LLC (“BOKF CDF”) is a certified development entity, created June 16, 2006. The purpose of BOKF CDF is to promote economic and industrial development, promote the creation and retention of jobs and tax base, and engage in other public welfare activities, in the State of Oklahoma and a larger service area.
On December 21, 2000, the legislation for the New Markets Tax Credit Program was approved and signed into law. The purpose of this program was to encourage private sector investments for New Market businesses located in qualifying census tracts.
BOKF CDF was awarded $35 million in tax credit allocation authority in the 6th Round of the New Market Tax Credit program. The program provides attractive financing products to businesses located in or intending to locate in low-income communities in the State of Oklahoma. The financing will assist businesses with job creation and redevelopment efforts in low-income communities.
Businesses should focus on retail, office, manufacturing, healthcare, charter schools, community facilities and mixed use, with a preferred loan size of $5 – $10 million. The business must be located in or willing to locate in a low-income census tract, targeting higher distress criteria. Projects must be financially viable. Certain “sin” businesses are excluded from the program including casinos, liquor stores, and tanning parlors.
Interested applicants should contact A.J. McKean amckeanbokf.com in order to obtain an application. A completed application, business plan, and historical and projected financial statements need to be provided in order to determine eligibility for the program.