Industrial Revenue Bond Form (PDF File)

IRB’s provide low interest tax exempt financing for qualified projects. Eligible businesses for tax exempt financing include manufacturers, non-profit corporations, multi family housing projects and some pollution control projects. Because of the high fixed cost for bond issued projects they must be greater than $1 million dollars to be cost effective. IRB’s of up to $10 million dollars are possible for private activity projects.

IRB funding can cover 100% of project cost and IRB’s are generally repaid over a 20 to 30 year period. Interest rates are below market because bond purchasers are not subject to Federal or State taxes. Effective interest rates to borrowers is generally 75% to 90% of prime rate for fixed rate and even lower for floating rate bonds.

Eligible projects must secure an opinion of bond council indicating the eligibility of the project and a letter of credit from a bank in an amount equal to the financing amount. The letter of credit is the primary collateral securing the Bond purchasers.