The tax credit marketplace is beginning to feel the impact of COVID-19 and the resultant business slowdowns. While several credit investors and syndicators are slowing down or limiting their purchases, a good number of them are conducting “business as usual”. We want to stress that most tax credits can still be sold into this marketplace.
Here are a number of quotes from our investor clients whose tax credit activity may be slowed:
“Better that we cut our credit amount in half. Our income is dropping like a stone”
“indefinite pause on hospitality investments”
“give me about a month to see if our projections will be ok”
“All the banks are closing what’s in the pipeline, but putting the brakes on all new business”
“The market was overheated prior to COVID. Every 10 years or so the market resets.”
“We’re still moving forward. We’ve received no direction to slow down our acquisitions.”
“Until we get a handle on revised [tax] projections we’re taking a pause on new purchases. I think we’ll be able to resume in the June/July time-frame.”
“Can’t issue a term sheet on hospitality now”
“We have developers pulling out of deals. Residential projects trying to get a loan right now – forget about it!”
“The pandemic has definitely impacted our business a bit. We are currently treading lightly in the area of credits due to the fact that our liabilities may be decreasing some this year in light of the pandemic.
“Currently, we are not entering into any new credit deals until we know how our premium volumes are going to shake out with the pandemic going on.”
However, as noted earlier, Clocktower Tax Credits works with dozens of Fortune 1000 Corporations, Banks, and Insurance Companies. The advantage of using a tax credit broker to sell a credit is the wide array of buyers in the broker’s contact base. Clocktower closed 10 separate tax credit sales in April 2020, to a range of buyers including three different insurance companies, two Fortune 500 corporations, and a medium-sized private company. We are working to fulfill the “buy” orders of many clients still seeking to reduce their projected tax liabilities now, and for up to five years in the future.
We hope this has provided a sample of tax credit buyer responses – which vary from “out of the market” to “full steam ahead”. Clocktower remains at full capacity, with our staff working remotely to complete tax credit transactions. For further information on the current marketplace, call President Jeff Jacobson at (978) 823-0200, or email him at JJacobson@ClocktowerTC.com.