New Markets Tax Credit


ARIEL Ventures, LLC, an Ohio Limited Liability Company, was formed in August 2001 and is a Minority and Women-Owned business. ARIEL Ventures provides finance, tax, IT and business advisory services, with an emphasis on real estate and economic development projects, which include public/private partnerships, tax credits and other incentives. In addition, ARIEL Ventures provides project consulting services, including financial feasibility, deal structuring and tax planning. The Company also assists in structuring and securing capital and financing for projects with multiple layers of financing, including Historic Tax Credits, New Markets Tax Credits (NTMC), Conservation Easements, Tax Increment Financing, public grants and loans, conventional bank financing and private equity. The Partners of ARIEL Ventures bring a proactive, creative approach to getting tough deals done.

ARIEL Ventures has collaborated with the Cleveland-Cuyahoga County Port Authority in 2003 and was successful in securing a $47 million NMTC allocation, for making investments in the low income communities of Northeast Ohio, through a newly created community development entity (CDE), Northeast Ohio Development Fund, LLC. ARIEL Ventures manages the day-to-day operations, deal structuring and compliance for Northeast Ohio Development Fund. Ariel Ventures collaborated with Kentucky Interlocal School Transportation Association (KISTA) in 2004 and was successful in securing a $25 million NMTC allocation. Ariel also collaborated with National City Bank in 2005 and was successful in obtaining a $125 million allocation.

The Partners of ARIEL Ventures have gained national recognition as experts in the New Markets Tax Credits area and have pioneered the development of the first state-of-the-art comprehensive software application for the New Markets Tax Credit Program, which has been approved for integration with the CDFI Fund's (Treasury Department) online reporting system, and is used by Community Development Entities nationally for compliance, reporting and operations.


  • Assistance with establishing internal policies and procedures to ensure compliance with NMTC Program, including compliance with the allocation agreement, CDFI reporting, IRS regulations. If you license our software, "CDE Solution", we can incorporate the compliance features of our software in your internal policies and procedures
  • Assistance with NMTC tax structures and financial projections, including the leverage model and combination with Historic Tax Credit
  • Assistance with tax credit investors, lenders and calculation of returns for investors.
  • Assistance with internal accounting and financial statement preparation
  • Assistance with CDEs reporting including CDFI's ATS reporting and CDFI's CIIS Institutional Level Reporting and Transactional Level Reporting
  • Assistance with compliance issues related to CDE's transactions with QALICB:
    • Advice related to supporting documentation and related tests performed to qualify the QALICB obtaining the financing
    • Review the loan/equity agreements for compliance with the NMTC program and CDE allocation agreement and identify other compliance issues based on the structure and terms of the transaction(s). Provide advice or suggestions related to the transaction structure and documents to address the compliance issues related to the underlying QALICB deal.
    • Review loan documents for QALICB transactions and advise on compliance and reporting items to be addressed within the agreements, such as CDFI required transactional level data points to be collected from the QALICB.
  • Ongoing Annual Compliance Assistance
  • Perform annual (or as often as deemed necessary) compliance consulting and procedures to test the CDE's compliance with the NMTC program; Specifically review the following:
    • CDE's certification standing (accountability and mission tests)
    • CDE's compliance with specific provisions in its allocation agreement, including:
      • % of investments within designated areas
      • % of operating costs and reserves permitted
      • timely reporting of required information to CDFI Fund and investors
      • other specific provisions as determined on a case-by-case basis
    • CDE's compliance with IRS temporary Regulations, including:
      • Satisfaction of the "substantially-all" test, either by direct tracing or safe-harbor method
      • Audit of QEI proceeds to QLICI's within 12 months of receipt of funds
      • Redeployment of principal or equity repayments by QALICB's by the end of the following tax year
      • Ongoing verification of QALICB tests if QALICB is deemed to be controlled by the CDE
    • Other procedures as deemed necessary

NMTC Compliance Software Features

To help you with your CDE-NMTC compliance, reporting and management, Ariel Ventures has pioneered the development of a comprehensive, cost-effective web-based software product, CDe-Solution, to handle CDFI and IRS compliance and reporting, and a sophisticated cash management module that allows for direct tracing of QEIs, from multiple tier leveraged investors, to multiple QLICIs, including multiple construction draws, QALICB principal repayments and redeployment. The software is also approved for automatic integration with the CDFI's CIIS system and is being used by several CDEs nationally.

Due to the huge demand for NMTC funds, several CDEs have had a significant project pipeline, almost 10 times their allocation. To help manage the QALICB qualification and approval process, we can customize a unique online QALICB pre-qualification and application form, with project pipeline management, based on your requirements, policies & procedures. We also provide assistance with establishing internal policies and procedures to ensure compliance with NMTC Program, including compliance with the allocation agreement, CDFI reporting, IRS regulations. If you license our software, "CDE Solution", we can incorporate the compliance features of our software in your internal policies and procedures.

Details of the key features of the software are listed below:

If you are interested in automating your CDE compliance and reporting, please call or email us, so we can schedule a demo to show you the features of our software.

Key features of the NMTC Software - "CDe-Solution" include:

  • Electronic file generated in CIIS format, to automatically upload required transactional level data to CDFI Fund's CIIS system. This has been approved for integration with the CIIS system.
  • Automatic system triggers and alerts for IRS compliance-related issues specific to the NMTC program
  • Flexibility to manage multiple subsidiary CDEs and multiple allocation years, including transfers of allocations to subsidiaries
  • Board member module, including automatic accountability tests and system alerts for annual LIC accountability status verification
  • Automated email notification to investors and board members
  • QALICB and Project template for automatic email to QALICB to input required QALICB information that can be automatically uploaded into the software
  • Qualification of QALICBs, identification of qualifying low income census tract and IRS percentage tests; electronic data storage capabilities for supporting documents used to qualify QALICB
  • Investor module, including QEI tracing to NMTC claimants, date stamp and system alerts for investment deadlines, leverage structure, direct tracing of QEI proceeds to projects and commitment management to multiple subsidiaries
  • Multiple project set up within QALICBs to handle multiple QLICI types and multiple funding draws for construction loans
  • Project cash management which provides for flexibility of multiple project draws, planning for future funding needs and designation of future investor commitments
  • Tracking of QALICB loan and equity repayments, including date stamp and system triggers alerting deadlines for reinvestment
  • Various reporting options for investors, QALICBs, Primary and subsidiary CDEs, and board members, including CDFI and IRS reports
  • Task management system
  • Document management system
  • Integration with loan software (customization required)
  • Integration with GL package (customization required)
  • Customized unique online QALICB pre-qualification and application form, with project pipeline management (customization required)