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FREQUENTLY ASKED QUESTIONS

1. What does "tax-exempt" mean?

2. What is the advantage for the borrower?

3. What is the interest rate for a tax-exempt IDB?

4. What types of facilities may be financed through a tax-exempt IDB?

5. What are the exceptions to financing non-manufacturing facilities?

6. Who issues tax-exempt bonds for borrowers in the City of Los Angeles?

7. What amount of time is required to complete a bond issue?

8. What type of security or collateral is required for an IDB?

9. What are the funding limits?

10. What are the terms?

11. Who are the IDA Bond Finance Team members?

12. Does the project involve a manufacturing or processing activity?

13. Will a significant portion of the project (60–75%) consist of core manufacturing or processing?

14. Are the capital costs of the project less than $10MM?

15. Does the company have any other tax-exempt bonds outstanding?

16. Will the project result in an increase of employees, job retention or some other public benefit?

17. Will the project involve the acquisition of an existing building?

The Code requires that if bond proceeds are used to acquire an existing building, an amount equal to at least 15% of the amount of bond proceeds used to acquire the existing building be used to rehabilitate the building.

Example:
Bond Issue $ 6.000,000
Building Cost (excluding land value) 3,000,000
Rehabilitation Requirement (15%) 450,000

18. How will the project’s asset values be amortized?

19. Would the company otherwise qualify for a conventional bank loan?

20. Have any cost been paid with respect to the project?

21. Will the company relocate its manufacturing facilities from one location in California to another?

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