August 17, 2009

Industrial Development Bonds

BusinessWeek says, "Few entrepreneurs consider bonds when they need major long-term financing. But by using a little-known set-aside in the public finance world called an industrial development bond, or IDB, small companies with strong track records can gain access to as much as $10 million with rates as low as 3%—similar to what large corporations get in the commercial paper market. (Up-front fees range from $70,000 to $200,000, but total costs are still about 20% to 30% less than conventional bank loans.) And while IDBs were designed to be used specifically by small manufacturers, the definition of "manufacturer" may surprise you, as the American Recovery & Reinvestment Act expanded it to include technology companies that manufacture software or other intellectual assets."

Since now is the time to start a business, why not consider IDBs instead of a loan?

No comments:

Post a Comment