Our target customer is a manufacturing or processing company with a successful earnings record and a strong financial condition – irrespective of corporate structure.

Types of Projects Financed
IDB proceeds can be used to finance new production equipment, new facilities or the acquisition of existing facilities including manufacturing companies (subject to IRS rehabilitation expenditures).

Transaction Size
The minimum tax-exempt IDB is typically $1 million and the maximum is $10 million based on the capital expenditures limitation* imposed by the Internal Revenue Code. Our tax leasing product can be bundled with an IDB for projects over the IRS capital expenditure limitation. We offer a number of innovative leasing structures to meet the needs of your company.

Costs Financed
The amount financed can be up to 100% of the project cost plus some bond issuance costs. Most equipment transactions offer a 100% advance while real estate financing has a more traditional advance of 75%–85% of the appraised value of the facility, subject to an underwriting review.

Financing Term
Typical terms range from 5 to 20 years based on the projected economic life of the production equipment or real property.

Repayment Structures
We offer fixed and floating rates, level principal or level debt service payments, as well as interest-only structures to accommodate escrow fundings prior to equipment delivery and construction completion.

Security
IDBs can be structured with various types of collateral pledged as security, including new and used equipment, real estate, or in some cases, a letter of credit. In addition, the security for the IDB may be located outside the issuer’s jurisdiction.

Convertible Financing
In addition to transactions that are initially funded as tax-exempt IDBs, we have the ability to fund transactions as taxable loans that can be converted to tax-exempt IDBs in the future. This accommodates situations where companies cannot receive state allocation until some time in the future or have a pressing need to fund a project prior to completing the IDB process. In either case, your company will assume the risk of receiving state allocation in the future. Customers who choose initial taxable financing will be given a one-time option to convert to a tax-exempt rate once the IDB issuance process has been completed.

Your company may qualify for IDB financing when acquiring an existing manufacturing facility. You may be able to use tax-exempt proceeds to acquire the fixed assets of the company being acquired. These assets must continue to be used for manufacturing and cannot be relocated. Tax-exempt funds cannot be used solely to finance used equipment without being part of an integrated facility. The IRS capital expenditure test* is applied to the jurisdiction where the acquired facility is located. At least 15% of the amount financed with IDB proceeds must be spent to refurbish the facility or equipment. This amount may be financed either through the IDB or paid directly by the company within 24 months of bond closing.