Wall Street is always looking for new opportunities to make money, which is why it’s not surprising that the phrase “opportunity zone” has caught its eye.

According to the New York Times, opportunity zones—distressed portions of the country that could use reinvestment—are currently drawing the interest of Wall Street investment firms. Some 80 funds have sprung up since January 2018, reports the Times, and each has a declared interest in investing in these potential opportunity zones and putting money into local revitalization.

But what are these opportunity zones, and how might Wall Street’s investments change the economic landscape?

What Is an Opportunity Zone?

The tax overhaul passed in 2017 included a wide-ranging difference when it comes to real estate. In essence, there are new real estate tax breaks available for specific “opportunity zones”—essentially, another word for economically impaired communities. These increased tax incentives can potentially draw the interest of major investors who want to utilize tax breaks to realize a better return on investment, which is why it’s no surprise that Wall Street may be looking to cash in.

According to the New York Times, an opportunity zone doesn’t always mean that Wall Street is looking to sink money into new ventures. Investment firms may have had their eyes on particular locations already and the benefits of these zones are the final push they needed.

Who Defines What an Opportunity Zone Is?

An opportunity zone is subject to the U.S. tax code, with some requirements including a poverty rate of at least 20% and limits on median income. This information comes from census tracts. And while that information might make it seem like opportunity zones are rare, the Brookings Institute reported that up to 57% of American neighborhoods may be up for consideration as one of these zones.

FundRise features more information on what these zones are and how they’re defined, and includes a map of potential opportunity zones across the United States.

What Will Opportunity Zones Mean for Small Businesses?

Wall Street putting “big business” money into speculative real estate ventures is nothing new. But there’s the possibility that the increased interest of the tax breaks created by expansive opportunity zones could also influence the decisions of a large number of small businesses.

Opportunity zones were created with the idea that the influx of money could create the demand for new jobs. As investment money trickles in, these new jobs would help revitalize economically depressed areas. That could mean more opportunities for small businesses to explore these same areas—or employ a greater section of local communities, therefore strengthening the economy of the entire area.

Small businesses might not be able to find an opportunity zone and make a major investment right away. They don’t have the resources of Wall Street. But with the recognition of potential money moving into these opportunity zones, small businesses who keep their eye on the trend may be able to identify opportunities before other small businesses.

Strategies for Small Businesses in Opportunity Zones

With all this in mind, how can a small business keep its ears open and find opportunities in these economically declining areas?

• Stay in touch with local investments. Discovering the potential opportunities means finding where Wall Street is putting its money and getting a sense of where the money might go in the future. That can help small businesses uncover those areas that are potentially due for a turnaround, which can result in higher demand for jobs and locally sold goods. Simply being aware of the opportunity zones is the first step; small-business owners should also read their local business news to watch for interesting developing stories.
• Secure financing to capitalize on opportunities. A small-business loan can be a major boost for a company that recognizes an opportunity, yet doesn’t have the capital to make the most of it. Small businesses that do a lot of research and due diligence when it comes to community investments could stand to do well with financing.
• Understand the changing shape of the landscape. It’s tempting to look at one zone of real estate and imagine things will never change. But a small business can make a wise investment by identifying neighborhoods that are on the rise.

With the right knowledge, experience and instincts, a small business can identify plenty of neighborhoods that might represent opportunities for growth and change.

Many of these might take place in official “opportunity zones.” But it requires capital, knowledge and research to make sure that a small business knows what it’s doing first.

Joe Resendiz is a Research Analyst at ValuePenguin, where he focuses on personal finance and credit research to assist consumers. Previously, Joe specialized on public sector and infrastructure financing at Goldman Sachs. He graduated from the University of Texas at Austin with a BBA in Finance.