Industrial Revenue Bonds
Industrial Revenue Bonds may be used as long-term financing of up to 100% of a project for:
- Acquisition of land, buildings, site preparation and improvements
- Construction of buildings
- Acquisition and installation of furnishings, fixtures and equipment
- Capitalizable soft costs (e.g., architectural and engineering, interest incurred during construction, costs associated with bond issuance, etc.)
Typically, tax-exempt IRBs have interest rates ranging from 70-85% of prime and are limited to $10 million per single issuance and $40 million total maximum per company. Taxable IRBs have an interest rate equal to conventional loans and have no limit. Terms for both are normally 10-20 years and can finance up to 100% of the project costs. The principal and interest on the bonds are paid solely from the funds derived from leasing and selling the facilities to the user company. Under most circumstances, upon complete payment of the bond issue, the lessee or user company acquires ownership of the industrial facility for a nominal sum.