Non-Profit Bonds

Description: QCREDA issues bonds to Non-Profit Organizations qualified as 501(c)(3) tax exempt organizations. QCREDA is empowered to issue on behalf of Illinois non-profit corporations Tax-Exempt bonds for any purpose permitted under its empowering statutes. Statutes require that non-profit bonds must be issued for capital expenditures.

Benefits: The benefits of Local Government Bonds include:
Long term – Maturity of the bonds is flexible and can range from ten to thirty years.

Low Interest Rate – Rates are generally 2.0% to 3.0% below Prime Rate. The interest rates are discounted to reflect Tax-Exempt status. Rates range well below conventional financing.

Flexible Terms – Interest rates may be fixed or variable and can finance up to 100% of the eligible project costs.

Favorable Terms – There is no fixed minimum job creation or capital investment requirements, although some jobs have to be created.

Eligibility: Non-profit bonds are subject to the restrictions set forth in the Code, such as the 2% cost of issuance limitation, the 10% reserve fund limitation and the 120% average useful life test. There is no requirement for equity; credit enhancers may make additional requirements. Non-Profit Bonds do not require volume cap.
Fees: A $2,000 non-refundable application fee is due when the application is submitted. An issuance fee of 40 basis points is due at closing along with an issuer counsel fee that ranges between $5,000-7,000 depending on the complexity of the bond. Costs of issuance funded from tax-exempt private activity bond proceeds are limited to 2.0%.

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