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Indiana Finance Authority

IFA > Tax-Exempt Bond Programs > Overview Tax-Exempt Bond Programs Overview

The IFA is authorized to issue tax-exempt bonds, which lower the cost of financing for manufacturing projects, health care facilities, private institutions of higher education and certain other qualified projects. In order to qualify for tax-exempt financing, an applicant that is not a 501(c)(3) must first be awarded "Volume Cap." Indiana is allotted annually a specific amount of Volume Cap that may be awarded to qualified applicants for the purpose of issuing tax-exempt bonds.

Tax-exempt bonds are often structured similarly to a term loan or mortgage, and the interest rates vary based on the company's financial situation, credit enhancements, method of sale of bonds and the current market. 

Volume Cap Program (prerequisite for tax-exempt financing through IFA)

  • The IFA awards Volume Cap to applicants within Indiana's allotted capacity to issue tax-exempt private activity bonds. Volume Cap is competitively awarded based on jobs created and/or retained, wages, capital investment, project location, dedication to low-income housing and other factors. A borrower who is not a 501(c)(3) must be awarded Volume Cap before issuing bonds through the IFA.

Large Bond Program (for lower-interest borrowing of amounts more than $3M)

  • Applicants who need to issue more than $3 million in bonds can utilize the IFA through this program. Also known as Industrial Revenue Bonds (IRBs) or Industrial Development Bonds (IDBs), these private activity bonds are issued by state or local government entities for the benefit of a private company.

Small Bond Program (for lower-interest borrowing of amounts $3M or less)

  • Applicants who need to issue $3 million or less in bonds can utilize the IFA's Small Bond Program. The bonds can be used for costs related to manufacturing, agriculture and nonprofit organizations such as charter schools.

Master Financing Bond Program (lower costs of issuance and more efficient documentation for multiple financings with the same borrower and lender)

  • Applicants who anticipate needing multiple financings over an extended period of time can utilize the IFA's Master Financing Bond Program.  A Master Financing Bond Program Agreement and each subsequent note/schedule will need to be submitted to the IFA for approval by its Board Members.