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Tax Exempt Bond Program

Administered by PIDC, provides tax-exempt bond financing for capital projects or equipment lease/purchase by certain manufacturing or 501(c)(3) organizations.

ELIGIBILITY

PIDC administers the Philadelphia Authority for Industrial Development (PAID) Bond Program. Tax-exempt bond financing is available to certain manufacturing facilities and/or non-profit 501(c)(3) facilities.

Non-profits are charitable organizations, including certain institutions in the health care and educational industries.

Manufacturing is defined as the making or production of tangible property, including processing that would result in a change in conditions of such property. All manufacturing borrowers of tax-exempt debt, plus any of its affiliates, can incur up to $20 million of capital debt in the City during any six-year period beginning three years prior to the date of the bond closing. The manufacturer cannot have outstanding tax-exempt debt anywhere in the USA in excess of $40 million.


FINANCING

PAID issues bonds that are non-recourse to PAID and PIDC requiring the beneficiary (non-profit or manufacturer) or bank guarantor, to be responsible for the repayment of the debt to the Bond purchasers. The Bond purchaser and/or guarantor in consultation with the investment broker or underwriter and borrowers, determine all business terms, including collateral, amount, term and rate.


TIMING AND PROCEDURE

To apply, potential borrowers must complete the PAID Bond Financing and DCED application. PAID’s Board must approve the financing. Prior to the PAID Board meeting, a TEFRA advertisement and public hearing must occur (as mandated by the Tax Equity and Fiscal Responsibility Act). The application is then forwarded to the Mayor’s Office and the Commonwealth’s Department for Community and Economic Development for approval. PAID bond-financing process requires approximately 8 to 12 weeks.


FEES

An Application fee of $2,000 (payable with submission of financing applications and non-refundable). An origination fee of .375% of the 1st $10 million, .25% of the 2nd $10 million, .125% of the 3rd $10 million, and .0625% of all amounts over $30 million (payable at settlement). PAID legal fees will apply and will vary based upon the issuance amount.

Fees are subject to change. Please confirm all transaction fees with PIDC prior to application.



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