U.S. Treasury’s CDFI Fund Awards $45 Million In New Markets Tax Credits to Pathway Lending
Pathway Lending to Deploy Investments Across Urban and Rural Communities
Pathway Lending announced its third and largest allocation, $45 million in New Markets Tax Credits, from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) to the nonprofit lender’s certified Community Development Entity (CDE). One of only two Tennessee-based awardees, Pathway Lending will deploy the investment in low-income urban and rural communities in Tennessee and Alabama.
In the calendar year (CY) 2022 round of the New Markets Tax Credits Program (NMTC), the CDFI Fund awarded $5 billion to 102 CDEs to spur investment and economic growth in low-income urban and rural communities nationwide. The CDFI Fund selected recipients from a pool of 197 applicants, requesting a combined total of $14.8 billion. Awardees represent 36 states and the District of Columbia.
“The New Markets Tax Credit plays a critical role in financing many vital businesses and community projects in our nation’s low-income communities,” said Assistant Secretary Graham Steele. “The investments that will result from today’s announcement will help preserve and create hundreds of thousands of jobs and spur economic growth in these urban, rural, and Tribal communities across our country. It is important that Congress sustains these investments by making the New Markets Tax Credit permanent.”
Pathway Lending CDE will deploy investments in projects to expand business operations, build community resiliency, and create and maintain quality jobs. Pathway uses NMTCs to facilitate projects that offer job creation, social services, environmental benefits, or other community advantages. Two of its recent projects, Container Technology Industries’ expansion, and Universal Health Care’s new treatment facility, leveraged $13.5 million of NMTC allocation and are projected to create 187 construction jobs, retain 174 full-time positions, and create 70 permanent jobs in Tennessee—while adding to the state’s economic output and providing much-needed community services.
“The New Markets Tax Credit is a powerful vehicle for bringing quality jobs and meaningful services to communities that need them the most. Over the past two years, we have leveraged $70 million in allocations into $250 million in total investments to create or retain over 2500 high-quality jobs,” said Pathway Lending CEO Clint Gwin. “We are humbled that the CDFI Fund continues to recognize our work and we view this new allocation as a great achievement for our organization and a win for the communities we so proudly serve.”
Pathway Lending CDE will assess potential projects with a preference for those that support economic activity in low-income geographies and a specific focus on minority-owned or controlled businesses that create sustainable quality jobs and/or provide community services for low-income individuals and communities.
Gwin continued, “A third NMTC allocation for Pathway Lending is especially meaningful to Tennessee – a state identified as receiving a relatively lower share of NMTC awards. We have built great momentum over the past few years and are actively identifying projects that will put this capital to work accelerating the creation of quality jobs and creating meaningful services for low-income communities.”
Established in 2000 by Congress, the NMTC Program attracts private investment to distressed communities. Individuals and corporations that make Qualified Equity Investments (QEIs) in CDEs can claim tax credits equal to 39 percent of the cost of the QEI claimed over seven years. CDEs invest the capital they raise into businesses in low-income communities and must complete a rigorous and competitive selection process overseen by the CDFI Fund to participate in the program.
Almost $63 billion in NMTC investments has been deployed in low-income communities and businesses through the end of fiscal year 2022. For every $1 dollar invested by the federal government, the NMTC Program generates over $8 of private investment to create jobs, construct new or rehabilitate commercial real estate, and provide highly valuable services in low-income communities.
About Pathway Lending
Founded in 1999 and based in Nashville, Pathway Lending is a community development financial institution (CDFI) certified by the U.S. Department of the Treasury. With $466 million in loans originated since its inception, Pathway Lending has grown to become a major lending institution in the Southeast, propelling meaningful economic growth in communities across the region. In 2022, Pathway Lending made more than $50.8 million in loans and delivered over 17,500 hours of technical assistance. Get to know our mission and the stories of the entrepreneurs and communities we serve at PathwayLending.org.