Service Description:
Tax-Exempt Industrial Revenue Bonds (IRBs) are a finance option that may be available to manufacturers that are creating or retaining jobs.
Benefits of IRBs:
Using tax-exempt means, IRB's offer businesses an effective lower interest rate than they would receive through conventional financing (1½ - 2½% less than market rate).
How they Work:
Bond financing resembles standard note and mortgage loans. A lender (bond purchaser) agrees to lend funds (bonds) to a company. Then the facilities or equipment financed by IRBs are typically mortgaged to secure the payment of the loan. In many cases, the repayment schedule is structured similar to that of a typical mortgage loan. Because of the IDA's interest in job and business creation, the IDA serves as the conduit for the bond issuance. In this capacity, the IDA re-lends the bond proceeds to the company.
Qualifying Projects include:
- New Construction
- New Machinery & Equipment
How to Qualify for IRB's
- Company contacts its bank to determine its interest in financing the project and receives an irrevocable letter of credit in the amount of the loan.
- Company contacts the IDA to receive an application.
- The IDA considers Company's application (requires approval by the IDA Board)
- Loan closes within 1 to 3 months (interim financing usually is provided).
IRBs are limited to $10 million. In order to be cost-effective, they should not be less than $2 million
Mini-Bond Program
Similar to traditional bond financing, Mini-Bond financing is designed for manufacturers seeking financing in the range of: $300,000 - $2,000,000.
Low-cost Mini-Bond financing is accomplished through pre-negotiated legal bond documents thereby limiting financing costs.
Interested companies in Industrial Revenue Financing are encouraged to request an application from the Jefferson County Industrial Development Authority.
Fees for Service:
Payment Methods
- $1000 cash/check to apply
- .25% of the total project cost amortized over the life of the bond
- EDC professional and legal expenses
Contact for more information:
Jocelyn A. Van Coney, Executive Director
Industrial Development Authority
P.O. Box 623
Hillsboro, MO 63050
phone: (636) 797-5386
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