BFA issues tax-free revenue bonds for federally recognized (501)(c)(3) nonprofit organizations. The bonds are not an obligation of the BFA or the State. Bonds can be used to acquire, renovate or construct buildings, acquire land and equipment and to refinance existing asset-based debt. A list of sample transactions is attached.
For information regarding nonprofit bond financing, please contact Jack Donovan at (603) 415-0191 or JackD@nhbfa.com.
Interested nonprofits should contact the BFA for an application. The prospective borrower completes an application and submits it to the BFA; there is no application fee for nonprofits. A summary of the nonprofit organization and its project, along with a resolution prepared by bond counsel to determine eligibility, are presented to BFA's Board of Directors for Official Intent. Borrowers must receive Official Intent from the BFA Board of Directors, or have their governing body approve a similar resolution, before costs are incurred to be eligible for reimbursement from bond proceeds.
Once a financing commitment has been obtained and documentation is completed, the project will be presented to the BFA Board for Final Approval. After Final Approval is granted, the project then must be approved by the Governor and Council at a public hearing. The bonds can then be closed.
The Directors of the BFA meet at least monthly. In order for an item to be placed on the agenda, all materials must be in our office two weeks prior to the meeting date.
A. Nonprofit Expansion - Organization has completed fundraising for new building, with pledges due over thenext seven years. Issuing $1.25 million bond to bridge receipt of pledges and provide$500,000 of term debt to complete project. Bond is being directly purchased byexisting investment manager. Estimated closing costs of $20,000. B. Construction of New Nonprofit Facility - Organization proposes to build a new $12.5 million campus. Rather than use endowment funds, organization will finance the project using a variable rate "lowfloater" bond, which will allow them to borrow on an all-in basis for approximately 2.5 percent using existing bank. C. Renovations and Finance - Organization is spending $1.25 million to renovate an existing building. Rather than use endowment funds to complete the project, as the nonprofit has in the past, theywill finance the renovation cost, plus refinance $1 million in existing debt, through atax-exempt bond. D. Equipment Purchase - Organization annually buys over $500,000 in computers and related equipment. Rather than use vendor financing as the nonprofit has in the past, they will finance theequipment with a tax-exempt capital lease, reducing their interest expense by nearly one-half.
Sample Nonprofit Transactions