Pathway Lending Deploys $7 Million in New Markets Tax Credits to Expand High-Quality Facilities and Manufacturing Capacity in Rural Tennessee
Transactions Generate $29.5 Million In Total Private Investment And 140 New Full-Time Jobs for Automotive Parts Manufacturer in Perry County, Tennessee
NASHVILLE, Tenn. (October 27, 2023) – Pathway Lending, a Tennessee-based nonprofit, and Community Development Financial Institution (CDFI), announced today its Pathway Lending CDE (a Certified Community Development Entity) has provided $7 million in New Markets Tax Credits (NMTC) as part of the financing package for NYX Linden, LLC’s expansion in rural Perry County.
Since receiving its first allocation in December 2021, Pathway Lending CDE has deployed $60.5 million in NMTC financing to support $234 million in total investments that strengthen manufacturing capacity and expand community facilities while also creating good jobs and important services in low-income communities across the state.
New Market Tax Credits: Supporting Tennessee’s role as the engine of automotive manufacturing in the Southeast.
With more than 900 auto suppliers, Tennessee is the heart of the southern automotive manufacturing corridor. With recent investments, such as those flowing into Blue Oval City in West Tennessee, the state is now poised to become one of the biggest makers of electric vehicles in the decades to come. However, that does not mean capital is readily available to support the work required for these manufacturers to keep pace with demand. The flexible nature of NMTC financing makes it one of the best sources of capital available today.
$7 Million NMTC allocation yields lasting community benefits.
NYX Linden, LLC, (NYX) a minority-owned and operated automotive parts manufacturer in Linden, Tennessee, recently secured contracts to supply parts and components for several new vehicles. Unable to keep pace with demand, NYX sought financing to expand its facilities, increase output, and generate efficiencies across its processes. However, due to current financial market conditions and collateral requirements, NYX was unable to secure the capital needed to fund the project in its original scope, which would not only delay the investment, but also decrease the benefit to the community in terms of job quality and new jobs created.
With $7 million in NMTC financing from Pathway Lending, NYX will expand its facilities by 64,000 square feet and acquire new, innovative equipment to accommodate the company’s projected growth. Pathway’s NMTC allocation is part of a larger, $29.5 million project, which will retain 251 existing jobs and create an additional 140 permanent full-time jobs in rural Tennessee with 100 percent of these jobs offering benefits, job training, and an average hourly wage of $18.95. Additionally, NYX will utilize the NMTC allocation to achieve environmentally sustainable outcomes, such as reduced water consumption, increased recycling and reuse of manufacturing scraps, and the installation of high-efficiency equipment to reduce energy consumption.
“The NMTC program offers businesses that are growing a flexible source of capital to close the financing gaps they face and unlock benefits, not only for the business, but for the community as well,” said Pathway Lending EVP Hank Helton. “We’re proud to bring this resource to Perry County to support their economy and improve residents’ quality of life.”
Established in 2000 by Congress, the NMTC Program attracts private investment to distressed communities. Since its inception through 2021, the NMTC Program has awarded $71 billion in tax credit allocations, resulting in the creation or retention of more than 938,000 jobs. It has also supported the construction of 76.9 million square feet of manufacturing space, 118.3 million square feet of office space, and 77.1 million square feet of retail space.
For every $1 invested by the federal government, the NMTC Program generates more than $8 of private investment. The NMTC Program catalyzes investment where it’s needed most – over 76% of New Markets Tax Credit investments have been made in highly distressed areas. These are communities with low median incomes and high rates of unemployment, and the NMTC investments can have a dramatic positive impact.
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. It 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 17,518 hours of technical assistance and education.
Pathway Lending established its Community Development Entity (CDE) in 2016 with the express purpose of attracting greater New Markets Tax Credits investments to Tennessee, a state the CDFI Fund has identified as underserved by the NMTC program for many years. Pathway Lending CDE secured its first allocation in December 2021. To date, Pathway’s CDE has allocated $60.5 millions through the NMTC program to support more than $234 million in total investments, retain over 1,160 existing jobs, and create over 604 new permanent jobs in Tennessee and Alabama.
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