BOND FINANCING

Open in new Tab BOND FINANCING Checking your eligibility or exploring your financing options? START HERE: Submit Financing Interest Form APPLY HERE Creditworthy manufacturing companies, 501(c)(3) not-for-profit organizations, and exempt facilities in New Jersey may be eligible for long-term financing under the Bond Financing Program. Amount $500,000 to $10 million in tax-exempt bonds for for-profit companies, up to 20 years for real estate and 10 years for equipment ………. $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit organization BENEFITS Longer terms ………. Lower cost ………. Fixed or variable interest rate USES Capital improvements and expansions ………. Land and building acquisitions, new construction and renovations, and equipment purchases ………. Projects owned and operated for local, county and state government bodies NJEDA issues conduit tax-exempt private activity bonds, the proceeds of which are used to provide financing. PROGRAM DETAILS ELIGIBILITY FEES MORE INFO QUESTIONS PROGRAM DETAILS Through a federally authorized program, the NJEDA issues conduit tax-exempt private activity bonds, the proceeds of which are used to provide financing. Taxable bonds are also available for a wide variety of businesses, such as distribution, etc. Taxable bonds offer similar flexibility in structuring rates and terms but are not subject to the restrictions placed on tax-exempt financing under the IRC. Bonds are sold via direct purchase or public offering. A financial intermediary, typically a bank, will directly purchase bonds from the NJEDA once it has performed a credit review on the applicant’s project. The bank sets the interest rate, terms and other financial details. In a public offering, bonds are purchased by an underwriter and sold to private investors in the public marketplace and may be structured with a bank’s commitment to provide a letter of credit (LOC) or a municipal bond insurance policy. Market conditions will determine the interest rate, while the bond’s terms and other financial details are set by the LOC provider. ELIGIBILTY Borrowers must meet the eligibility requirements outlined in the Internal Revenue Code (IRC) in order to qualify for tax-exempt bond financing, including: Manufacturing/processing facilities Governmentally owned public Facilities that furnish gas; sewer facilities; and solid waste disposal, including certain recycling facilities Certain facilities for governmental bodies, which qualify as tax-exempt governmental obligations Certain not-for-profit 501(c)(3) entities, including service organizations, educational institutions and health care facilities Certain assisted living facilities, which qualify as residential rental projects Please be advised: New Jersey State law prohibits most cannabis license and certification holders from receiving or continuing to receive an economic incentive from the NJEDA. If the applicant, or any person who controls the applicant or owns or controls more than one percent of the stock of the applicant, has applied for or received a license or a certification from the New Jersey Cannabis Regulatory Commission (NJ-CRC), the applicant is ineligible for this program and should not proceed with an application. If an application is received from an applicant that meets this criteria, the application will be declined and the application fee will not be refunded. FEES Application Fee: $1,000 Application Fee for Bond w/ Guarantee: $2,000 Closing Fee for tax-exempt bonds: 0.5% of tax-exempt bond amount of up to first $15 million; 0.375% of the next $10 million and 0.5% of the bond amount in excess of $25 million Closing Fee for taxable bonds: one half of the closing tax-exempt bond fee noted above Closing Fee for nonprofits and governmental bodies: 0.5% of tax-exempt bond amount up to $10 million and 0.25% above this amount