The Industrial Development Bond (IDB) Program makes both tax-exempt and taxable industrial development bonds available to credit worthy companies seeking to finance industrial and commercial facilities. Its objective is to provide long-term financing at favorable interest rates and terms to companies in Virginia. Through IDBs, creditworthy manufacturers and 501(c)(3) entities can borrow up to 100% of the cost of acquiring, constructing, and equipping a facility, including site preparation. IDBs may also facilitate tax-exempt funding for leased manufacturing facilities and equipment. All projects financed with IDBs must meet the federal tax code's eligibility requirements.
-Tax-Exempt Industrial Development Bonds (IDBs): Available for the acquisition, construction or expansion of manufacturing facilities statewide. Also available for “exempt” projects, such as solid waste disposal facilities.
-Taxable Industrial Development Bonds: Available for non-manufacturing projects and other projects ineligible for tax-exempt financing.
For tax-exempt bonds, the maximum bond amount is $10 million and the availability of bonds is subject to state bond volume caps. The capital expenditures for the project, when added to the company's capital expenditures in the same jurisdiction as the project for the three years immediately preceding and three years following the closing of the financing of the project, cannot exceed $20,000,000. The minimum project size is $750,000 and there is no maximum size for taxable bonds.
For-Profit Business; Non-Profit Organization
Eligible Recipients Detail:
Eligible borrowers include new or expanding manufacturing companies, "exempt" facilities such as solid waste disposal facilities, and 501(c)(3) entities. The maximum manufacturing project size is $20 million; 501(c)(3) entities and exempt facility projects are not subject to this dollar limitation. At current interest rates, unless a bank will be directly providing the financing, projects under $3 million are generally not cost-effective due to the transaction costs of bond financing.
Last Mile Infrastructure; Building Infrastructure
Eligible Purpose Detail:
Broad range of capital expenditures related to the acquisition, construction, or expansion of facilities. Able to finance many of the ancillary costs of the project, including site preparation, capitalized interest during construction and some issuance costs.
The application fee is $1,000, in addition to an annual fee of 0.1% of the outstanding principal of the bond. Please contact the agency for additional details.