All successful projects require a balance of sources and uses, but the most impactful projects require more than a traditional mix of cash and debt to accomplish the double- and triple-bottom line results desired by investors. In addition to direct placement of tax credit investment, we specialize in identifying, structuring, and securing financing for projects with high community impact and multiple layers of financing. Beyond traditional commercial loans, equity can come from New Markets, Historic, Low-Income, Film, and Renewable Energy Tax Credits. Other sources include Tax Increment Financing, SBA/HUD/USDA guarantees, Brownfield subsidies, solar and energy efficiency incentives, public grants, loans, and bonds.
Fusion’s value-added services allow project sponsors to accomplish these objectives in three critical ways: structuring the capital stack, project management, and securing subsidy.
Project Structuring and Underwriting
Our team works with sponsors to understand the scope of the planned projects, available sources of capital, and any financing gaps. Based on site location, projected employment, historic significance, and other factors, we then identify both broad and nuanced qualifying characteristics of the project in order to develop a sound tax and financing structure for the project. Based on this structure, we prepare a financial model that includes the additional one or more layers of additional financing identified, based on the specific criteria desired. Our models can reflect the net benefits to sponsor or investor, based on the target criteria provided by the client. Whether based on one or multiple variables, we can provide scenario-specific underwriting packages that go beyond basic qualification metrics and projected sources and uses of funds: we can also incorporate multiple variables (e.g., number sponsors, various mixes of potential subsidies, or lending criteria), overall development and construction budgets, pro-forma income and cash flows for underlying operating businesses, flow of funds and draw schedules, IRR and equity multiples, and potential exit strategies.
Project Management and Consulting
Optionally, if engaged early enough in the process, Fusion can guide project sponsors through all phases of interaction with legal, accounting, and other specialist services related to the project, including the identification, selection, and use of the most appropriate resources at the most appropriate time for the team. Fusion provides peace of mind to sponsors and investors by saving valuable pre-development dollars and increasing project efficiency. By interfacing with specialists along the way, Fusion can facilitate information exchange and make most efficient use of specialist time and expenses based on project needs at any given time, thereby keeping project financing on schedule and minimizing unproductive billable hours.
Securing the Subsidy
Once the desired subsidy is determined and the deal structure is agreed, Fusion works with sponsors to develop a comprehensive solicitation memorandum that provides a comprehensive overview of the project itself, highlights all community benefits, and demonstrates the satisfaction of all salient criteria for applicable programs. We solicit interest in the project from lenders, investors, community development entities (CDE’s), state and local development entities, and others in order to obtain the best possible combination of allocation, pricing and terms for the project.
Since 2012, Fusion has arranged over $40,000,000 in combined tax credit transactions and bridge funding. For transferable tax credits, Fusion’s investment conduit counts 90% of the Fortune 100 as clients and has facilitated over $1,000,000,000 of tax credit transactions. We can offer competitive pricing on any transferable tax credit, of any size, in any state in the USA.
For solicitation of New Markets Tax Credit (NMTC) allocation, Fusion has access to a network of CDE’s across the country, with specialties in all qualifying areas of NMTC eligibility, including:
- real estate and operating business financing;
- rural and urban census tracts;
- allocations for highly distressed census tracts in under-served states;
- targeted allocations for projects in census tracts meeting secondary criteria such as:
- USDA food deserts
- medically under-served areas
- Small Business Administration (SBA) HUB Zones
- Delta Regional Authority (DRA) and Appalachian Regional Commission (ARC) distressed counties
With a decade of experience serving the Big 4 and Fortune 500 in public accounting and advisory capacities, Fusion is capable of delivering other services as well. In addition to our specialty related to tax incentives and Federal, State, and local subsidies, Fusion engages with clients in other areas as well, including: preparation of traditional real estate investment pro forma models and waterfalls, real estate fee development, historic preservation research, operational and financial consulting, and strategic planning.
We are available for presentations and public speaking on any of the above topics. Often we are asked to facilitate workshops for non-profit organizations or state/local economic development organizations in order to facilitate interest in particular areas. If you or your organization are interested in hosting such an event, or simply would like to learning more about how these programs work and hear about examples of successful projects, please contact us today.