Not-For-Profit Bonds

Description

The Upper Illinois River Valley Development Authority (UIRVDA) acts as the issuer of the bonds, passing along its DOUBLE TAX-EXEMPT status on to a Not-For-Profit 501(c) (3) company to finance the acquisition of fixed assets including land, buildings, machinery and equipment.

Because the interest on the bonds is not subject to state or federal income taxes, investors and lenders require a lower interest rate to achieve an equivalent after-tax return. Therefore, the borrower receives a preferential interest rate, generating substantial savings.

Eligibility

Funds must be used by a not-for profit corporation qualified under the federal tax code as a 501 (c) (3) for the purchase of fixed assets.
Funds can be used to build a facility, acquire necessary land, or new equipment.
Eligible borrowers can include hospital systems, medical centers, behavioral health centers, medical clinics, continuing care centers, private charter schools or private colleges or YMCAs.
Funds can be used to acquire an existing facility as long as 15% or more is used to rehab the structure.
Funds expended prior to sixty days before receiving initial approval from UIRVDA may not be eligible.
The capital improvements must take place in the territory of UIRVDA in the counties of Bureau, Grundy, Kane, Kendall, Lake, LaSalle, Marshall, McHenry and Putnam.

Benefits

Lower Interest Rate

An UIRVDA Not-For-Profit Bond is exempt from state and federal income taxes, making it an attractive investment for the bondholder. The interest rate available on these bonds is far lower than conventional financing, and you can expect your interest savings to range from 150 – 300 basis points lower than a conventional loan.

Finance up to 100% of the project cost

contingent upon meeting credit standards of a local bank backing the bond.

Smooth Process

UIRVDA has been described as a “Nimble Issuer” because of its flexible guidelines and an expedited approval process. We can assemble a team of Bond specialists who have a thorough understanding of all the legal and financial aspects of this type of transaction. We'll work closely with you every step of the way, answering your questions, helping you avoid pitfalls, and making sure you get the financing that's right for you.

Application

Interested Not-For-Profit entities should complete a one-page application and submit a non-refundable application fee. There is an issuance fee paid at closing along with other professional costs. The cost of issuing a Bond is generally more expensive than a conventional loan, but the total costs are usually recovered in the first year of interest savings and will continue through the life of the bond.