$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 organizations
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
Working capital and debt refinancing
Fixed or variable interest rates
See "Program Details" below
PROGRAM DETAILS: Through a federally authorized program, the EDA issues conduit tax-exempt private activity bonds, the proceeds of which are used to provide financing. 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 airports, docks, wharves
- Facilities that furnish water, electric, and 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.
Taxable bonds are also available for a wide variety of businesses, such as manufacturing, commercial, warehouse, and 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 EDA 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.
- Application fee: $1,000
- 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 not-for-profit corporations and governmental bodies: 0.5% of tax-exempt bond amount up to $10 million and 0.25% above this amount
- Closing fees for conduit bond transactions, except for conduit bond transactions that support multi-jurisdictional, interstate projects: capped at $300,000
- Guarantee fee: if required, will be up to 0.5% sized to percentage guarantee required, not to exceed 0.5%. (For example, 25% guarantee will require a 0.25% fee, 50% guarantee will require a 0.5% fee.)
Division of Taxation Tax Clearance Certificate required. Certificates may be requested through the State of New Jersey’s Premier Business Services (PBS) portal online.
- Under the Tax & Revenue Center, select Tax Services, then select Business Incentive Tax Clearance.
- If the applicant’s account is in compliance with its tax obligations and no liabilities exist, the Business Incentive Tax Clearance can be printed directly through PBS.
Please note: It is the applicant/client’s responsibility to maintain a current and clear tax clearance certificate. If a current and clear certificate is not evidenced to EDA at time of closing, EDA will not proceed with closing.
*All fees are non-refundable.