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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?

For tax-exempt IDBs, the project must be a qualified manufacturing facility. Additionally, the project must result in certain public benefits such as job creation or retention. The proceeds from the bonds issued can be used to construct, expand and relocate qualifying manufacturing facilities as well as acquire new equipment.

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?

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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