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IDFA – Financing Programs

IDFA Illinois Development Finance Authority Summary of IDFA Financing Programs – Business Financing Programs

Industrial Revenue Bonds

Financing for manufacturing facilities for acquisition of land, buildings, and equipment.

Projects: Can be used for manufacturing projects between $1.5 million and $10.0 million (subject to IRS capital expenditure limitation). Occasionally, small projects between $1.0 million and $1.5 million can also be financed if issuance costs are controlled.

Structuring Requirements: Requires bank participation for 100% of bond amount.

Advantage: Provides access to borrowing at interest rates significantly below Prime.

Exempt Facilities Bonds

Financing for privately owned solid waste disposal facilities, wastewater treatment facilities, and water supply facilities.

Projects: Can also sometimes be used to finance a portion of a manufacturing project, when aggregate project amount exceeds $10.0 million IRS capital expenditure test.

Structuring Requirements:
Generally requires bank participation or municipal bond insurance for 100% of bond amount.

Advantage: Provides access to borrowing at interest rates significantly below Prime.

Participation Loans

IDFA interest-rate “buy-down” program on a portion of a commercial bank loan for manufacturing companies.

Projects: Can be used to purchase the lesser of 50% or $300,000 of a conventional bank loan for a manufacturing project.

Structuring Requirements: IDFA purchases a participation in a portion of a bank loan (subject to program parameters). Bank has the option to retain up to 0.50% of the 1.50% interest rate savings (attributable to the IDFA participation) to cover administrative costs.

Advantage: Provides borrower with an interest rate on IDFA participation amount that is 1.00% to 1.50% below the participating bank¹s loan rate. (Example: results in savings of up to $4,500 annually on a $300,000 IDFA Participation purchased in a bank loan of $600,000 or more.)

Other IDFA Bond Financing Programs

501(c)(3) Revenue Bonds

Financing for acquisition of land, buildings, and equipment by 501(c)(3) not-for-profit corporations.

Projects: Can be used for projects of at least $1.5 million (no legal maximum). (Occasionally, small projects between $1.0 million and $1.5 million are also financed if issuance costs are controlled.)

Structuring Requirements: Generally requires bank participation for 100% of bond amount.

Advantage: Provides access to borrowing at interest rates significantly below Prime.

Local Government Bonds

IDFA provides State of Illinois Tax-Exempt Status on Local Government General Obligation bond issues for capital improvements.

Projects: Any capital, infrastructure, or public works project for units of local government (e.g., municipalities and school districts).

Structuring Requirements: IDFA can only purchase General Obligation debt from Local Governments. Structuring Advantage: IDFA¹s statutory State Revenue Intercept can help less creditworthy borrowers obtain municipal bond insurance.

Advantage: Lower interest rates since Bonds are exempt from State of Illinois income taxes.

Fre$hRate Taxable Bond Pool for Home Mortgage Loans

IDFA taxable bond program that capitalizes a home mortgage financing program that provides 4% down payment assistance grant for home purchasers.

Projects: Loans are originated through participating Illinois home mortgage lenders. (Andrew Charles, Berkshire, CasBank, CNI Mortgage, Draper & Kramer, First Mortgage, Irwin Mortgage, Lincoln Mortgage, Malone Mortgage, Midwest Funding, Midwest One, Mortgage Corp. Of America, National Mortgage, North American Mortgage, Platinum, Temple-Inland, United Financial)

Structuring Requirements: Participating home purchasers must generally earn less than 125% of median State or County income and must qualify for FHA/VA, RHS, or conventional mortgage financing (subject to program criteria).

Advantage: Provides borrower with a grant to cover 4% down payment, thereby enabling home ownership with almost no borrower equity.

IIDFA Technology Development Bridge for Venture Capital
Provides seed stage equity financing for high technology companies

Projects: IDFA matches new private investment. Typical IDFA investment ranges from $150,000 to $300,000.

Advantage: Helps leverage private venture investment by accredited venture capital investors.

For more information: visit the Illinois Development Finance Authority Web Site www.idfa.com

DCCA – Financing Incentives

DCCA Department of Commerce and Community Affairs
Summary of DCCA Incentive Programs

The Illinois Department of Commerce and Community Affairs has a number of programs and services in place to assist in attracting and retaining Illinois businesses. For Business Development, following are some of these programs:

Participation Loan Program DCCA works with banks and other conventional lenders to provide financial assistance to small businesses that will employ Illinois workers. The State will participate in loans up to 25 percent of the total amount of a project, but not less than $10,000 nor more than $750,000. DCCA participates with Development Corporations (Loan Program) to provide the same basic loan program in the region served by that Development Corporation. The Minority, Women and Disability Participation Loan Program is similar to the Participation Loan Program except that participation may not exceed 50 percent of the total project, subject to a maximum of $50,000. For more information on all three programs call (312) 814-2308 in Chicago or (217) 782-3891 in Springfield, IL.

The Industrial Training Program assists Illinois companies in training new workers and retraining/upgrading the skills of their existing workforce. ITP grants may be awarded to individual companies, as well as to intermediary organizations offering training to meet the common training needs of multiple companies. For information call (312) 814-2809 or (217) 785-6284.

The First-Stop Business Information Center of Illinois provides individuals and businesses with access to information and referral assistance to guide them through the permitting, licensing and regulatory processes. First-Stop also can link them to other available resources that can help them comply with government regulations and enhance their competitiveness. For information call (800) 252-2923.

Illinois F. I. R. S. T. (Focused Industrial Retention Support Team) brings together the resources of DCCA and Argonne National Laboratory, NORBIC (North Business and Industrial Council), Chicagoland Enterprise Center, ComED, People¹s Gas and the Chicago Tribune to identify and assist manufacturers interested in expanding, modernizing, relocating, training, retraining and developing new technologies. The team is supported by many private volunteers and professional technical service providers. The public/private partnership provides information and technical assistance to the Northern Illinois industrial base in a way that promotes Illinois positive business climate. For information call (312) 814-5252.

For more information, visit the State of Illinois Department of Commerce and Community Affairs Web Site at www.commerce.state.il.us

IDCEO – Illinois Department of Commerce and Economic Opportunity
Many programs and resources sponsored by the State of Illinois and by our Governor are listed at this website www.illinoisbiz.biz