JEDA Resource Center

Q: What loan program does JEDA offer?
A: The JEDA loan program is the Tax-Exempt Industrial Revenue Bond Program (IRB)

Q: Is an Industrial Development Bond (IDB) and Industrial Revenue Bond (IRB) the same?
A: Yes, Industrial Development Bond (IDB) financing is also called Industrial Revenue Bond (IRB) financing, and involves the issuance of "tax-exempt" bonds.

Q: What type of companies can apply for IRB financing?
A: The tax-exempt IRB program is for manufacturing, 501(c)(3), and non-profit organizations, while the taxable IRB program is designed for for-profit manufacturing, industrial and service firms.

Q: You mentioned 501(c)(3)s. What type of companies qualify as a 501(c)(3)?
A: The typical 501(c)(3) includes hospitals, YMCAs, assisted-living and continuing care facilities, and more recently, educational institutions.

Q: How can IRB funds be used?
A: Typically, IRB funding can be used for the construction of a new facility, construction of an expansion to an existing facility, the purchase of land with some limitations, production related equipment, and certain costs of issuance. However, neither inventory nor working capital can be financed with bond proceeds

Q: Are there minimum size standards of bond transactions?
A: Yes. Normally $1.5 million is the minimum amount that makes the deal affordable. Large bond transactions create economies of scale, thus making the transaction cost effective.

Q: What are the advantages of IRB financing?
A: Advantages to IRB financing include obtaining an interest rate generally 1.5 to 2.5% below conventional rates and long-term financing (typically 15-20 years). In some cases 100% financing of the project cost, and the consolidation of new construction and prior bond debt are among the advantages.




When reviewing a loan request, the lender is primarily concerned with repayment. Loan officers judge loan applications based upon what is commonly referred to as the five C's of Credit.

1. Character: Lenders will order a copy of your credit report and look at debt repayment trends. They want to know simply if you pay your bills and if you pay them on time. If there are blemishes on your report, explain them.
2. Cash Flow: Lenders will look at historical and projected cash flow statements to determine whether you will be able to repay the loan and still have money to adequately run the business. Include written justification for your projections in your loan proposal.
3. Collateral: Collateral is an asset (something you own) which a lender may claim to satisfy a loan in the event the loan is not repaid according to the required terms. Often the assets purchased with the loan may serve as collateral. If the business does not have enough collateral, the financial institution will look to personal assets.
4. Capitalization: Capitalization refers to the basic resources of the company including owner's equity, retained earnings and fixed assets. You do not have to be fully capitalized to qualify for a loan.
5. Conditions: Factors that affect the success of the company, yet are external to the business, will also be considered by the lender. Examples include government regulation, competition, and industry trends.