SWIDA finances development through the sale of bonds that are both state and federal tax exempt, thereby providing an even lower interest rate to clients.
Bonds are issued for projects ranging from $800,000 to $40 million, with benefits that include:
- Interest rates that are lower than conventional financing by 1 to 2.5 percent
- Terms that are as long as 40 years
- Possibility of credit enhancement through a tax intercept mechanism
- Access to attentive finance professionals and quick turn-around time
- Access to creative financing options
Who can borrow?
- Local Governments, including:
– Cities, villages, towns or townships of any size
- School districts
- Fire protection districts
- County governments
- Community colleges
- Library districts
- Park districts
- Water and sewer districts
- Public building commissions
- Industrial sewage and solid waste facilities
- Private Sector Businesses, including:
- Manufacturing businesses
- Commercial businesses – TIF qualified
- Office and research facilities – TIF qualified
- Distribution facilities – TIF qualified
- Non-profit 501c3 Entities
Types of Bonds Available
Industrial Development Bond/Industrial Revenue Bond Program
Industrial Revenue Bonds (IRB), (also known as Industrial Development Bonds), are issued by SWIDA to assist manufacturing businesses, qualified non-profit entities and “exempt facilities” such as airports, ports and waste facilities.
Revenue bond proceeds can be used to finance:
- Construction of a new facility
- Construction of an expansion to an existing facility
- The purchase of land, with some limitations
- Production-related equipment
- Certain costs of issuance
Local Government Revenue Bond Program
SWIDA also issues bonds through the Local Government Revenue Bond Program to assist units of local government in financing capital improvement projects. SWIDA issues tax-exempt securities in the municipal market and uses the proceeds of the sale to purchase securities issued by a local government. Qualified local governments include those that are entitled to issue debt obligations under Illinois law.
The local government revenue bond program provides local government units with the opportunity to achieve interest cost savings and to structure flexible loan repayment terms. These additional cost savings are available on local government revenue bonds issued only through SWIDA and sold in Illinois. Local governments save tax dollars through lower interest rates paid on bonds sold in Illinois.