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VOLUME 2 - ISSUE 2 - SEPTEMBER 2024 In this Issue... Using NMTC to Drive Economic Change Why We Believe in the Power of the NMTC Program Navigating NMTC Eligibility Why Invest in NMTC Eligible NMTC Areas Breaking Down the NMTC Process Much More!Fueling Transformation Transforming businesses and communities is at the core of our mission at Dakota Business Lending. This mission goes hand in hand with one of our key financing tools – the New Markets Tax Credit (NMTC) program. At the heart of this financing option is an opportunity to jumpstart and encourage investment in low-income and distressed areas, creating quality and accessible jobs and transforming our local communities. It’s a powerful financing tool, bringing new opportunities to some of the places in ND that need it most. In this issue of ACTIVATE Magazine, you’ll find insights from our team, local lenders, businesses, and community leaders that have utilized the NMTC program. From expert interviews to real life stories and everything in between, you will get a good idea of the transformative power of this program and how it can help so many people throughout North Dakota and beyond. We hope this issue ACTIVATES (or (re)ACTIVATES) your passion to fuel transformation in your own arenas… whatever that may look like. Here’s to making a lasting impact - one program, one project, or one idea at a time. - Dakota Business LendingTable of Contents Meet the Dakota Business Lending Team ........................................................................................... 3 New Markets, New Opportunities: The Transformative Power of the NMTC Program ............ 6 Understanding NMTC: History, Purpose, and Development .......................................................... 7 NMTC: Marvin Composite’s Window of Opportunity ........................................................................ 9 Ask Dakota Business Lending ............................................................................................................... 11 Why Invest in NMTC: Insights from Local Banks ............................................................................. 13 Navigating NMTC Eligibility: Basic Application Checklist and Impact Requirements ............ 15 Vault: Unlocking a New Chamber and New Opportunities ........................................................... 16 NMTC: Building Superior Walls of North Dakota .............................................................................. 17 Interview with Steve Dusek: Why We Believe in the Power of the NMTC Program ................. 19 Mapping Opportunities: Local Maps of Eligible NMTC Areas ....................................................... 21 Pay It Forward: Taking NMTC’s Transformative Power One Step Further ................................. 23 Meet our NMTC Governing and Advisory Boards ........................................................................... 25 Revitalizing Communities: Using NMTC to Drive Economic Change ........................................ 27 Packet Digital: Innovation Soars with NMTC ................................................................................... 29 How It Works: Breaking Down the NMTC Process ........................................................................... 31 Transforming Local Entrepreneurs: Meet the 2024 Entrepreneur District Residents ............. 333 | September 2024 Steve Dusek President & CEO 14 Years at DBL One of my favorite examples is the deployment of $60M in NMTC to 7 manufacturing businesses throughout ND. It has created hundreds of accessible and quality jobs for individuals in our state. Katie Anderson Closing Officer 6 Years at DBL One of my favorite success stories is Aspire Realty. The owner’s story is remarkable, and I love how DBL was able to help make her dreams a reality. Anjie Martins Senior Credit Manager 3 Years at DBL I love driving around my community and seeing the businesses we have helped. It is not only about that business, but also all the employees and families. It makes me feel like we are making a difference in the community I love. Roxi Pfliiger Business Development / Commercial Loan Officer - ND 10 Years at DBL I recently worked on my 1st NMTC project, Superior Walls, which included NMTC, SBA 504 & PACE buydown. Leveraging these programs, the business will manufacture a revolutionary product and create quality jobs for the area. Emily Schroeder Community Lending Director 8 Years at DBL I’m inspired when businesses who have been told “no” come to us for growth and financing. I love finding their path to bankability by growing their credit and finance background and getting a “yes!” from a bank/credit union. Kaitlyn Wiebusch Marketing Director 7 Years at DBL I love getting to hear the stories of our borrowers that achieved their dreams. Whether we provided them with financing or helped them grow with our other resources, I’m proud to know we could play a small part in that. Meet Our Team! What is your favorite example of impact or transformation related to the work that DBL has done? Christie Williams Business Development / Commercial Loan Officer - MT 5 Years at DBL I love watching a borrower realize their dream is achievable, create a plan, and execute it. The impact that one person with a dream and the support of their team can have on an entire community is incredible. Paige Naylor Credit & Underwriting Specialist 5 Years at DBL My favorite part is the success stories from our borrowers. They highlight the perseverance of small business owners and how strategic financial support can lead to continued success and growth. dakotabusinesslending.com | 4 Ann Peterson VP / Loan Operations 2 Years at DBL I love it when a business, like Abbiamo Pasta, takes a local product and transforms it into something we see or buy in our everyday life. It provides economic impact to a community by increasing the tax base and providing jobs. Rochelle Anderson Portfolio Manager 2 Years at DBL I loved watching Nome Schoolhouse go from a run-down building to a beautiful, creative space that has won national awards. I even saw one of their felting kits for sale in my small hometown! Abby Brost Loan Servicing Specialist 2 Years at DBL Visiting the businesses we have helped in person and seeing how well they thrive in their environments is so rewarding. The fact that DBL gets to be a small part of their venture makes it even more special. Britta Thompson Marketing Intern 1 Year at DBL I love all the incredible resources DBL provides to support small businesses and partners across our footprint. It’s truly rewarding to visit the businesses we have helped and to see the positive impact firsthand. Jason Gerdes Business Development / Commercial Loan Officer - MN 2 Years at DBL The Community Impact Loans, as part of our CDFI program, have made a huge difference in our region. They allow us to be creative and provide financing options for businesses that may not fit traditional or SBA 504 loan criteria. Scott Schake Business Development / Commercial Loan Officer - ND, MN 2 Years at DBL One of my recent favorite projects is a salon in Jamestown. The owners were driven to open this business, overcame start- up challenges, and obtained the financing needed. Stories like that are why I love to come to work. Michaela Schell Entrepreneurial Development Director 2 Years at DBL A small business owner was surprised and grateful when I answered her questions since she wasn’t a borrower. At DBL, that’s what we do. We help, answer questions, and make connections…whether they are a borrower or not. Jo Ann Back Business Development / Commercial Loan Officer - MT 1 Year at DBL I love how DBL prioritizes its employees’ well-being and fosters a strong, supportive culture. This positive work environment enables us to serve our borrowers to our fullest potential. Meet more of our team!5 | September 2024 Meet Our Team! (Cont.) What is your favorite example of impact or transformation related to the work that DBL has done? Julie Jaksha Director of Small Business Advising 11 Months at DBL Assisting entrepreneurs to achieve their dreams is so rewarding. I recently helped a first-time business owner refine his idea, create financial projections, and address credit issues to secure a loan and start his business. Tyler Byron Business Development / Commercial Loan Officer - ND, MN 9 Months at DBL I appreciate DBL’s access to various sources of capital, allowing us to not only work with smaller/ start-up businesses to help them make their dreams a reality, but also expanding businesses to create jobs in our footprint. Sophia Bates Marketing Intern 1 Year at DBL Our focus on impact shapes everything we do. From Community Impact Loans to SBA 504, success comes in volumes when our focus is on our entrepreneurs, businesses, communities, and ultimately the impact made. Kate Savage Loan Servicing Specialist 1 Year at DBL I love the experience, knowledge, and passion our team provides. While providing financing is our core, we have a team member for each part of the journey that is invested in the customer’s vision, not just the bottom line. dakotabusinesslending.com | 6 New Markets, New Opportunities: At Dakota Business Lending, our mission goes far beyond financing. We believe in driving economic growth and transforming businesses across our footprint. In 2021, we decided to take this mission to a whole new level with the New Markets Tax Credit (NMTC) program…giving us even more opportunities to create the best and most unique financing packages to support our borrowers and lending partners. And we’re excited to share all about it! In this issue, we want to take you through a wide range of topics related to the NMTC to show you just how impactful this program can be. But where do we begin? Let’s start at the very beginning… The Transformative Power of the NMTC Program What is NMTC? NMTC is not just a financing program; it’s a transformative opportunity centered around filling very specific financing gaps for small businesses across the nation. The program, administered by the U.S. Department of Treasury, works on incentivizing private investors to fund projects in low-income and distressed areas to help drive economic growth. Bridging Gaps The NMTC program is known for its ability to bridge financing gaps for projects that would otherwise struggle to secure funding. Through the “but-for” test (“but for” NMTC, the project would not be possible), NMTC determines whether a project can proceed with its financial support…ensuring significant and transformative impact. Collaboration and Partnerships NMTC cannot be administered in a silo! Another essential component of the program is strong partnerships between Community Development Entities (CDEs), financial institutions, and other local stakeholders that help further its impact. This brings together all kinds of entities under one mission to support businesses and transform local economies. Targeting Underserved Markets The NMTC program was created specifically to assist low-income and distressed census tracts across the nation. By focusing on these key areas, NMTC directs investment where it can make the greatest impact, revitalizing neighborhoods and driving economic growth where it’s needed most. Economic Impact NMTC is all about impact, and the program has certain parameters in place to measure that impact and ensure that it is maximized to its full potential. NMTC- supported projects in ND target job creation, both during construction phases and through permanent employment opportunities, creating quality and accessible jobs. The program also works to develop other critical aspects such as improving access to critical goods and services and boosting the local economy. Throughout the remainder of this issue, we’ll dive deeper into each of these topics (and more!) and show you just how transformative this program can be. If you want more information about NMTC, visit our website or reach out to a loan officer in your area. www.dakotabusinesslending.com/loans/new-markets-tax-credit 7 | September 2024 Understanding NMTC: History, Purpose, and Development The New Markets Tax Credit (NMTC) program has become a vital tool in fostering economic growth and revitalizing low- income and distressed census tracts. By incentivizing private investment, NMTC has transformed countless neighborhoods, bringing new opportunities to local businesses and communities. Here’s a look into how this program came about and why it is considered a cornerstone of community development efforts across the United States. History of NMTC The NMTC program was created as part of the Community Renewal Tax Relief Act of 2000 to boost investment in low- income and distressed communities across America. Administered by the U.S. Department of Treasury’s Community Development Financial Institution (CDFI) Fund and the Internal Revenue Service (IRS), the NMTC program lives out its mission by offering federal tax credit incentives to entities who invest in Community Development Entities (CDEs) like Dakota Business Lending. Those CDEs use the investment to finance a wide range of projects that help revitalize distressed areas in their local communities. Did You Know? • Dakota Business Lending is the 1st ND- based financing entity to receive a NMTC allocation. • The NMTC program spans across all 50 states, the District of Columbia, and Puerto Rico. • Since inception, the NMTC program has awarded $76B+ over the course of 19 allocation rounds to CDEs across America. • In 2023, a total of 102 CDEs across the nation received NMTC allocations and have been working to administer NMTC dollars throughout the next year. • As of FY 2022, NMTC projects nationwide have created and retained over 857M jobs. • On average, every $1 of NMTC allocation generates more than $8 in private investment. • The tax credit equals 39% of the investment paid out over 7 years. *as of September 2023 Purpose of NMTC The primary goal of the NMTC program is to drive investment into low-income and distressed communities that have historically struggled to get financing. By providing tax incentives to investors, NMTC encourages the development of projects that stimulate the following impact: • Economic Development - Attracting private investment to spur economic growth. • Job Creation - Generating quality and accessible jobs to individuals in low-income and distressed areas. • Community Revitalization - Supporting projects that enhance the social and economic foundation of communities. dakotabusinesslending.com | 8 Development of NMTC Over the years, the NMTC program has adapted to meet ever-changing economic conditions and community needs. The allocation process has become more streamlined and the focus on measurable impacts has strengthened. Evolution of NMTC Program The NMTC program continues to foster community development by driving revitalization and breathing new life into areas that need it most. Businesses, banks, and investors are encouraged to utilize this program to help further its mission of transforming communities across the nation…starting right here in North Dakota. Learn more about NMTC. www.dakotabusinesslending.com/loans/new-markets-tax-credit Sources: • https://nmtccoalition.org/ • https://www.cdfifund.gov/programs-training/programs/new-markets-tax-credit • https://www.cdfifund.gov/programs-training/programs/new-markets-tax-credit/award-announcement-step • https://www.novoco.com/periodicals/articles/nmtc-has-record-success-and-wide-support-time-permanence-now 2000 Establishment of the NMTC program under the Community Renewal Tax Relief Act. 2024-2025 The CDFI Fund plans to open a $10B allocation combined round in the fall to help even more CDEs across the U.S. administer this program. 2005 Expansion through the Gulf Opportunity Zone Act, which extended the program’s reach to areas affected by natural disasters. 2015 Reauthorization through the Protecting Americans from Tax Hikes (PATH) Act, ensuring continued support for distressed communities. 2020 Further extension included in the COVID-19 relief package, highlighting the program’s importance during economic crises.Next >