Tax-exempt industrial development revenue bonds can be used by manufacturers for the acquisition, renovation and construction of buildings or the purchase of land and new equipment. Project sizes range from $500,000 to a federally imposed maximum of $20 million.


Tax-Exempt Industrial Development Bonds

taxes. Tax-exempt rates vary depending upon prevailing market conditions but variable rates are historically well below prime.

IDBs are not direct obligations of the BFA or the State of New Hampshire. The individual or corporation on whose behalf they were issued is legally obligated to repay them. The State has no obligation to repay the holders of IDBs and does not in any way guarantee these bonds.

The Business Finance Authority's Tax-Exempt Industrial Development Bond (IDB) Program provides credit worthy manufacturers below market rate financing for the purchase of fixed assets. The goal of the program is to create employment by providing value added manufacturers with the capital needed to expand their operations.

The key feature of the IDBs is their tax-exempt status which lowers the cost of the financing. If a project qualifies, interest paid on the bonds is exempt from federal income



  • Manufacturers- companies which manufacture, create or produce tangible or intangible property, including processing resulting in a change in the condition of such property. Uses such as software companies and wholesalers are not considered manufacturers 
  • Borrowers may not have more than $40 million of tax-exempt bonds outstanding nationwide
  • Total capital expenditures with respect to all facilities (not just those being financed) in the municipality where the project is located are limited to $20 million during the six year period starting three years before and ending three years after the date the bonds are issued
  • At least 75% of bond proceeds must be spent on core manufacturing and functionally related space and equipment. Office space must be excluded from this calculation. A borrower can allocate costs to comply with this requirement
  • Project must be located in New Hampshire and create or retain jobs in the state


  • Fixed asset expansion projects including the acquisition, renovation and construction of buildings and the purchase of land and new equipment
  • Project size ranges from approximately $500,000 to a federally imposed maximum of $10 million
  • Bond proceeds may be spent over three years If a borrower is purchasing an existing facility, 15% of bond proceeds must be applied to renovation of the facility
  • Bond proceeds for land acquisition cannot exceed 25% of the total bond amount 
  • Non-capitalizable costs, which include issuance costs, cannot exceed 5% of bond proceeds. Up to 2% of bond proceeds can be used for issuance costs
  • Bond proceeds cannot be used to refinance existing debt


IDBs are sold either in the public market or through private placements with banks or institutional investors. In some cases, a rated letter of credit may be necessary to attract investor interest. The BFA maintains a list of investors which have expressed an interest in purchasing IDBs.


Interested companies should click here to fill out an application. The prospective borrower completes an application and submits it with the application fee to the BFA. A summary of the company and its project, along with a resolution prepared by bond counsel to determine eligibility, are presented to BFA's Board of Directors for Preliminary Official Action. Projects must receive Preliminary Official Action from the BFA Board of Directors 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 normally meet on a monthly basis. 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 non-refundable application fee must accompany the application to the BFA. The application fees are as follows:

BOND AMOUNT                                      APPLICATION FEE
$0 - 1,000,000                                          $400
$1,000,001 - 2,000,000                           $600
$2,000,001 - 10,000,000                         $800
$10,000,001 - and over                           $1,000

Upon issuance of the bonds, the BFA will charge the company a one-time issuance fee as follows:

BOND TERM                                            ISSUANCE FEE
less than 10 years; >$2,000,000             5/8%
less than 10 years; <$2,000,000             1/2%
more than 10 years; >$2,000,000           3/4%