UB Community Development, LLC (UBCD) President, Alex Jones, announced the creation of a new $7 million New Market Tax Credit (NMTC) loan pool following the company’s successful funding of its previous $9M NMTC loan pool. The new $7M NMTC loan pool is designed to encourage small business growth and economic development across Alabama and the Florida Panhandle. UBCD partnered with community development partner, United Bank, to create the loan pool. United Bank is responsible for the fund of $7M while UBCD is responsible for structuring the loan pool and is currently seeking new eligible projects to fund under the $7M allocation.
“Ensuing access to capital is essential to sustaining and growing small business across our markets,” Jones said. “The creation of this loan pool provides the benefit of tax credit funding to small business that would typically not pursue such loans based on the size of their projects and associated transactional costs.”
The loan pool is designed to assist companies with growth, expansion or improvement of operating cash flow. Loan size will range from $100,000 to no more than $2,000,000. Using capital created from the sale of New Market Tax Credits, borrowers receive up to 25 percent of their funds at zero interest as an economic development incentive. Because of the complexity and expense, transactions involving New Market Tax Credits are often not available for projects less than $5 million. The creation of the loan pool gives UBCD the advantage of making smaller loans without additional costs. As a hometown bank committed to economic and community development, the creation of today’s loan pool is significant to the stabilization and future expansion of small businesses in United Bank’s service area and beyond. It was made possible because of the Bank’s designation as a Community Development Financial Institution (CDFI) and certified Community Development Entity (CDE) with a mission to bring economic viability to rural and low-to-moderate income areas. Since earning the CDFI designation in 2010, United Bank’s team has focused on creating products and services that positively impact consumers and small business.
United Bank has been recognized by the FDIC for its work in these areas.