The NJRA offers creative bond financing solutions to companies seeking financing for capital improvements and expansions. The NJRA acts as a conduit by issuing its qualified small issue bonds for the purpose of acquiring or constructing capital facilities for qualifying borrowers so that the borrowed funds (bond proceeds) can be treated as tax-exempt.
The NJRA sells bonds to raise capital for making long-term loans at attractive, below-market interest rates to a broad range of qualified businesses and not-for-profit organizations. The NJRA has the ability to issue $100 million of taxable and tax-exempt bonds annually to stimulate revitalization in New Jersey's urban areas. Financing raised through bond issues offers several advantages:
Lower interest rates than a conventional bank loan.
Interest earned by purchasers of tax-exempt bonds are exempt from federal income tax and the state's gross income tax. These savings are passed on to the borrower as a below-market interest rate.
Longer terms than a traditional commercial loan.
Up to 20 years for real estate; up to 10 years for equipment, unless the economic life of the asset is less.
To qualify for
bond financing you must qualify under the Internal Revenue Code's (IRC) eligibility requirements.
Certain nonprofit (501) (c) (3) organizations, such as:
Social Service organizations
Child Care Facilities
Commercial and industrial projects located in federally designated Empowerment Zones or Enterprise Communities
In addition, redevelopment projects must be located in any of the NJRA's eligible municipalities.
Proceeds from tax-exempt bonds may be used for land and building acquisition, new construction or expansion, purchase of new equipment and machinery and debt/refinancing and working capital. The amount of tax-exempt bonds for manufacturing companies is $750,000 -$10,000,000. Nonprofit organizations are not subject to the same restrictions for use of funds. The amount for nonprofits is $750,000-No Limits.
To apply for assistance from the NJRA Bond Program, please download the bond application. Submit completed application to the NJRA at 150 West State Street, Second Floor, P.O. Box 790, Trenton, NJ 08625.