Transaction timeline: Q4 deadlines you need to know

October 10, 2023

The weather is beginning to cool down, and, before we know it, 2023 will draw to a close. Even so, there is still time to engage in a transaction in transferable tax credits — whether as a buyer or a seller of 2023 credits. The market for transferable tax credits is new, but growing rapidly. With good partners and the right resources, corporate taxpayers can save money on their current year taxes, manage their effective tax rate, and support important sustainability goals all at once.

We recently hosted a panel of experts to discuss the concerns and considerations that are likely to arise during a transaction. Our panelists fielded a number of questions on what to expect in deal timelines. Based on our discussion, our team put together an outline of a transaction timeline: illustrating the major milestones providing a realistic picture of the time to transact going into year end.

Every transaction has unique complexities and timeline. This timeline should serve as a general guide.

Breaking down the timeline: what do you need to do?


Prospective buyers will want to identify potential projects of interest and make an expression of interest. Crux allows buyers to review the whole marketplace, with hundreds of millions of dollars of credits across hundreds of vetted projects on the platform. Crux provides buyers with an estimated credit pricing range for a given project, based upon market data. Buyers can review project attributes that support sustainability narratives, including whether a project is co-located in a low income or historic energy community, or whether the project developer met prevailing wage and apprenticeship requirements. 

If a seller accepts the general terms related in the buyer’s non-binding expression of interest, both parties are able to begin negotiating a term sheet.  The term sheet includes key details such as the pricing, the cap on third-party fees that will be that will be covered by the seller, timing of payment and receipt of the credits (if PTCs), and other key issues. 

In most deals today, the seller must also obtain insurance. Thus, at this juncture, a seller will need to begin pricing insurance policies that conform to the buyer’s negotiated expectations. Expect insurers to perform detailed due diligence, so leaving plenty of time for that process to unfold is critical.

To keep a transaction moving on time, both parties should endeavor to execute term sheets by the end of this month. To help move this process forward, Crux has invested in developing standardized term sheets which contain important economic and business terms, streamlining negotiations and reserving a fulsome legal review for later stages. 


By this point, hopefully insurance and (potentially) buyer due diligence are well on their way. The seller may have received requests for additional documentation, and should endeavor to upload that information as promptly as practicable to the data room to support buyer/insurer due diligence.

Both parties will also begin negotiating definitive documents. Crux’s standardized Tax Credit Transfer Agreement (TCTA) provides a useful starting point for buyers, sellers, and their legal advisors. Crux’s deal team supports transactions from origination through closing, available to answer questions regarding standard terms in transferable tax credit transactions, make referrals to insurance or legal partners, and serve as a resource for buyers and sellers. 

December: closing time

If parties have not yet signed the TCTA, targeting early December may be appropriate, leaving plenty of time to move on to the next and last stage: closing.

Upon transaction closing, the buyer of the tax credits should convey cash funds to cover the agreed credit transfer for 2023. Engaging a tax advisor (if buyer and seller have not already done so) would ensure that tax filing requirements are met. 

Most buyers will aim to close ahead of December 15th, when fourth quarter estimated tax payments are typically due.

While typically less prolonged than a tax equity deal, a transaction in transferable credits still takes time. Buyers, sellers, and their advisors will want to reserve adequate time to review documents, negotiate, and conduct due diligence. Engaging in the market early this quarter will help parties avoid an unwanted year-end timing crunch. Crux is here to help at every stage in the process — get in touch with us today to get started.  

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