IDBs / Manufacturing
CSCDA can assist eligible manufacturers to finance capital projects through the issuance of tax-exempt Industrial Development Bonds (“Bonds”). A manufacturer can finance projects at a lower interest rate than conventional financing because the interest paid to the bondholders is exempt from federal (and in some instances state) income taxes. Eligible manufacturers can use the low-cost, bond proceeds to finance the acquisition and rehabilitation, or construction of manufacturing facilities. Bond proceeds may also be used for the acquisition of new equipment.
In addition to its traditional Industrial Development Conduit Bond Program, CSCDA offers a Small Issue Public Benefit Program designed to cost-effectively assist manufacturers with projects or new equipment purchases of less than $5 million. CSCDA will work directly with the borrower to privately place the Bonds with a qualified institutional buyer. The advantages of the Small Issue Program include low-cost access to tax-exempt markets, predetermined finance team and a fixed interest rate.
To reserve the right to issue tax-exempt industrial development bonds, CSCDA and the manufacturer must file an application with the State of California to secure an award of volume cap. CSCDA staff will guide each developer through the state application process. Since inception, CSCDA has issued over $473.7 million in Bonds for more than 170 manufacturers throughout California, including over $149.4 million for more than 69 equipment only purchases.
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