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PENN IDA Tax Exempt Loans are provided through EDC Finance Corporation in conjunction with the Penn Industrial Development Authority (Penn IDA). Tax-exempt bond financing opportunities are available to certain entities throughout the Commonwealth through Industrial Development Authorities (IDA). EDC Finance Corporation provides staff support for Penn IDA to assist entities with pre-qualification and structuring options.

  • Most IDA bond financing options start to have a significant payback when the loan amount exceeds $1,500,000
  • Penn IDA has $10,000,000 of bank qualified tax exempt financing available annually for non-profit transactions

Key Benefits

  • Below market interest rates for qualified bank loans – interest earned by the bank is exempt from federal and state income taxes

Funding Uses & Purposes

  • Land acquisition
  • Building construction \ expansion \ renovation
  • Designated infrastructure
  • Long-term machinery & equipment (new only)
  • Bond refunding
  • Soft costs related to above items

Eligibility

  • Manufacturing
  • Nonprofit 501(c)(3) entities
  • Assisted living / multi-family housing
  • Energy related organizations
  • Solid waste disposal
  • Transportation facilities
  • Wastewater treatment
  • Other exempt facilities

PennIDA-TaxExempt_01    PennIDA-TaxExempt_02

Loan Structure

The borrower will work with their bank to receive credit approval terms for their loan. Simultaneously, EDC Finance will determine eligibility and receive tax exempt status approval through Penn IDA. The borrower will close with the bank when all approvals are in place.

Amounts

  • No designated minimum
  • No maximum loan amount except for manufacturers ($10 million per project)
  • 100% financing is permitted

Terms

  • Tax-exempt interest rate set by bank
  • Usually the rate is established at 70-80% of the bank’s standard loan rate
  • Average maturity cannot exceed 120% of average life of assets financed
  • Bank will perform credit underwriting for all privately placed transactions
  • Manufacturers must meet several qualifying criteria – please call EDC Finance to discuss

Job Requirements

Not Applicable

Closing Costs

  • $750 Application Fee (applied to Closing Fee)
  • 0.25% Closing Fee
  • Advertising Fees (varies based on actual costs)
  • Bond Counsel & Other Legal Fees (varies based on actual costs)
  • Post Issuance Audit/Servicing Fees (varies based on actual costs)
where To Apply