Advantage Capital Partners has built a strong and successful track record of public-private partnerships with state and federal economic development organizations. These partnerships create jobs and build communities:
- New Markets Tax Credit Program
- State-Level New Markets Development Programs
- Small Business Investment Credit Programs
The New Markets Tax Credit program, an award-winning economic development initiative administered by the U.S. Department of the Treasury, provides tax credits for private capital investment in economically distressed communities through certified Community Development Entities (CDEs). The CDFI Fund is responsible for administering the competitive allocation of tax credit authority to CDEs, which it does through annual allocation rounds. Since the program’s inception in 2000, and implementation in 2002, the Treasury has awarded more than $33 billion in allocations.
CDEs that receive allocations are required to invest the proceeds of the qualified equity investments in low-income communities (LICs) over a seven-year period. These investments spur economic development in underserved areas of cities and counties across the nation.
- To date, Advantage Capital has participated in the highly competitive process and received an award eight times, for a total allocation of $524 million —making the firm one of the top NMTC allocatees in the country.
- Through 2011, we had invested in nearly 150 different low-income community businesses using capital raised under the federal New Markets Tax Credit program and the state New Markets Development programs. These investments have created thousands of direct and indirect jobs, and have attracted millions of dollars in additional private capital in underserved and low-income regions.
Advantage Capital relies on an advisory board to provide an investment dialogue. Members are residents of LICs or directly accountable to traditionally underserved markets. To learn more about the advisory board, click here.
Advantage Capital Partners also participates in a number of state-level New Markets programs, which attract investment in low-income communities through a state tax credit modeled after the federal program. The tax credits are only available to highly qualified investors already accredited under the federal program. The state programs attract patient investment capital to a state’s low-income communities, promoting new expansion, creating new job opportunities and building on existing growth in the state.
Advantage Capital participates in state-level New Markets Development programs in Louisiana, Missouri, Illinois, Florida, Mississippi, Kentucky, Oregon and Maine.
- Through Advantage Capital’s innovative use of these programs, the firm has been able to intensify the direct impact of its federal New Markets allocation, turning $507 million in federal allocations (through 2012) into $848 million for direct investment in some of the most economically-challenged communities in the country.
Advantage Capital Partners is a leading participant in small business investment credit programs, which strengthen state economies by stimulating the flow of financial capital to early stage and expanding small businesses, building venture capital infrastructures, creating high-paying jobs and increasing state tax revenues. Advantage Capital currently participates in programs in Alabama, Colorado, Connecticut, Florida, Louisiana, Missouri, New York, Texas, Wisconsin, and Washington, D.C.
These programs create pools of privately managed investment capital by offering tax incentives to insurance companies that do business in the state, tapping a source of funds previously unavailable for higher risk venture investments.
With small businesses responsible for a large proportion of job creation and employment, this dynamic segment of the economy has benefited from more encouragement by state and local governments. These state investment programs reflect this interest combined with private-sector expertise in identifying, evaluating and financing businesses. State officials provide regulatory oversight and coordination while professional venture investors in the private sector raise funds, make and manage investments.