TransPORT Development Financing
Revenue bond financing is an important source of funds for the development of public and private commercial enterprise. Many port authorities have successfully utilized bond financing to construct or rehabilitate property for public benefit. Similar financing can be offered as a conduit bond for private business, and payable from loan, lease, or installment sale payments made by the private enterprise. The financing can apply to construction, improvement and equipment. The Port issues the bonds, that is, acts as a conduit for financing. It does not purchase the bonds or actually lend the money, nor does the State of Illinois.
Bond financing offers a number of advantages. A customized repayment structure is one appealing feature of such financing. Take the common example of a manufacturing plant that arranges for interest- only payments during the ramping up phase, with faster paced amortization payments after revenue starts. Or, imagine a company with a highly seasonal production schedule that might benefit from seasonal accommodation of payments: higher during the productive season and lower when business is predictably slow. Other features that may be written into the bond agreement are no prepayment penalty, or longer repayment period than is customary with a conventional loan. Finally, though not all bond financing is tax-free, it is possible under certain conditions.
Because bond financing is so flexible, and capable of individually tailored terms, it is almost impossible to predict the possibilities of any particular negotiation apart from the concrete circumstances of the parties involved. That is why bond financing is such a specialized field.
Contact TransPORT Executive Director, Steve Jaeger, to begin a conversation with our bond financing specialists, if you think bond financing may be a beneficial choice for your firm.
