East Bay Access to Capital

Industrial Development Bonds (IDB)

The IDB program is a federally funded service with state oversight to encourage manufacturing business investment, create manufacturing jobs and accelerate industry growth. The goal of the program is to provide small to medium sized businesses with low interest and long term capital to purchase larger facilities and equipment and increase business growth rates. The program works through an Industrial Development Authority to issue bonds for businesses. The County of Alameda is the local issuer of the bond. Banks with "A" credit ratings or better guarantee repayment of the bonds and make payments to bond purchasers. The bank issues a letter of credit with an annual cost of 1.5% of the principal balance. The balance is negotiated with the business for collateral and repayment. The business requesting the letter of credit must meet the bank's lending requirements: two years of profitability; existing cash flow to service the IDB debt; and equity of 25% for land and buildings, 10% on equipment. Projects cannot exceed $20 million and includes all capital expenditures in the city, three years before and after the sale of the bond. Projects in multiple cities have a maximum of $40 million. $10 million of that amount is tax excempt and the balance is a taxable bond. Since January 2009, IDB weekly variable rates averaged 0.34% (1.84 APR). 

Industrial Development Revenue Bond Program

The East Bay Economic Development Alliance (EDA) staffs Alameda County's IDB program and suppors IDB Projects in Contra Costa County. The IDB team Financial Advisor helps obtain the letter of credit bank, coordinates the IDB bond team and prepares the State IDB Application. 

Contact: Luis Aguilar, Operations Manager, (510) 272-3889, Luis@eastbayeda.org
Contact: Walt Vennemeyer, Progressive Capital, Financial Advisor, (415) 388-1535, procap@jps.net