Hi I am Taylor Moffett of Hawley Dean in this video is about how to monetize tax credits I’m with Kelso us my website is Kelso dot Usk tlso got us at any rate yes you can monetize tax credits yes you can sell tax credits everybody says you can’t but that’s wrong why is that wrong well they’re they’re technically.
Correct you can’t sell the tax credits but you can securitize the tax credits and sell the underlying securities so it’d be kind of like if if someone says Taylor you can’t sell this golf ball and I go okay.
And then I have a cop and I say hey this golf.
Ball is in this this cup I can sell the cup the golf balls in it so cup for sale with whatever is in it and and someone.
Buy that cup and that is exactly how you sell tax credits you have to securitize the tax credits that means you’re going to turn them into a security like a stock or a bond type thing but we don’t want to sell it as just a regular.
Stock you want to use something like a limited liability company membership percentage or a limited partnership master limited partnership limited liability limited partnership there are all different types of vehicles that you can use to do that but here’s how you do it number one we have to value your tax credits and determine for how long are you going to forward sell your tax credits you may want to sell your tax credits just for one year in the future or two years in the future or five.
Years in the future normally people will say oh if you’re going to securitize your tax credits you’re just kissing them all goodbye for everything in the future.
But that’s not the case you can use derivative instruments to do anything you want that’s my specialty and what I do is I help design stripped securities derivative instruments all types of things so that you can.
Secure ties and monetize your tax credits because that’s a whole bunch of money that you’ve got sitting on your balance sheet I know a guy that has 14 million dollars worth of tax credits and they’re just sitting there and he’s not doing.
Anything with him and I thought oh my gosh there are probably a lot of clients that need this service I’ll make a video.
And I’ll try to reach a few people and if you’ve got all of these millions of dollars where the tax credits sitting there.
Sell those things that’s your money get it so I.
Can help you do that what we do is we first design something we decide how long you’re gonna sell and then we create a value for that we have to do a formal business valuation with pro formas and.
Everything so that investors can.
Look at this and see what it is and then we put together an offering we securitize what we want to use an instrument that’s.
Safe for you you don’t want to pay your dividends away to other people you don’t want to pay company can profits you don’t want to give liquidation rights to people you don’t.
Want to give voting rights to people you have to design all of that stuff so you’re just transferring an empty cup only with the tax credits in it and none of the other good stuff that you want to keep like voting control of your company so we create a valuation we create the instrument we create everything and then we create.