IBank (FAQs)

IBank Frequently Asked Questions (FAQs)

What is IBank?

The California Infrastructure and Economic Development Bank (IBank) is the State of California’s only general purpose financing authority. The Legislature created IBank in 1994 to finance public infrastructure and private development that promote a healthy climate for jobs, contribute to a strong economy, and improve the quality of life in California communities. IBank operates according to the Bergeson-Peace Infrastructure and Economic Development Bank Act in California (Government Code Sections 63000-63089.98) et seq. As of October 2019, IBank has financed more than $55 billion in infrastructure and economic development projects. IBank is located in the Governor’s Office of Business and Economic Development (Go-Biz), has a five-member Board of Directors, and an Executive Director who runs the day-to-day operations. IBank has broad statutory authority to issue tax-exempt and taxable revenue bonds, provide loans to state and local governments for public infrastructure and economic expansion projects and loan guarantees to help small businesses. IBank’s current programs include the Infrastructure State Revolving Fund (ISRF) Program; Bond Financing Program, including: 501(c)(3) Bonds, Industrial Development Bonds; Exempt Facility Bonds; and Public Agency Revenue Bonds; as well as the Small Business Finance Center. In addition, IBank created the California Lending for Energy and Environmental Needs Center (CLEEN) to help meet the State’s Greenhouse Gas Reduction Goals.

IBank is a self-supporting governmental entity that pays for its operations from service fees and interest earnings on loans and investments. The Infrastructure State Revolving Fund (ISRF) Program, a direct loan program, was originally funded with seed money from the State’s General Fund in the late 1990s and early 2000s. ISRF loans are currently funded with the proceeds of tax-exempt ISRF revenue bonds.

What is the Infrastructure State Revolving Fund (ISRF) Program?

The ISRF Program provides financing to public agencies and nonprofit corporations sponsored by public agencies for a wide variety of infrastructure and economic development projects. ISRF Program funding is available in amounts ranging from $50,000 to $25 million, with terms for the useful life of the project up to a maximum of 30 years. Eligible projects include (not limited to):

  • Educational, cultural and social facilities
  • Environmental mitigation
  • Goods movement-related infrastructure
  • Hospitals
  • Industrial, utility and commercial facilities
  • Military infrastructure and defense conversion
  • Parks and recreational facilities
  • Ports and public transit
  • Power and communications
  • Public safety facilities
  • Sewage/solid waste collection, treatment and disposal
  • Streets and highways
  • Water projects (drainage, supply, flood Control, treatment and distribution)

Who can apply for Infrastructure State Revolving Fund (ISRF) Program financing?

Eligible applicants must be located in California and include any subdivision of a local government, including cities, counties, special districts, assessment districts, joint powers authorities and nonprofit organizations sponsored by a government entity. For a more comprehensive list of eligible projects and more information, click here.

What are bonds and how are they used?

Government agencies sell bonds to finance a variety of projects and activities. When investors purchase bonds, they essentially lend money to the bond seller, or issuer. In this way, a bond is similar to a loan. In return for the bond proceeds, the issuer promises to pay the investor a specified rate of interest over the life of the bond and to repay the bond when it comes due.
Municipal Bonds
Bonds issued by government agencies are called municipal bonds. The funds are used to finance projects that benefit the community such as roads, schools, bridges, sewers, parks or water treatment. Most bonds issued by government agencies are tax-exempt. This means bondholders do not have to pay federal income taxes and, in most cases, state income taxes on the interest they earn.
What is a conduit bond Issuer?
As a conduit issuer, IBank issues bonds on behalf of a borrower and then lends those proceeds to that borrower. The borrower provides security to the bondholder and agrees to repay the bonds.

What Types of bonds does IBank Issue?

Industrial Development Bonds (IDBs)
Tax-exempt conduit revenue bond financing for eligible small to mid-size manufacturing companies up to $10 million for the acquisition, construction, rehabilitation and equipping of manufacturing and processing facilities.
501(c)(3) Bonds
Tax-exempt conduit revenue bonds provide low-cost financing for capital improvement projects for nonprofit public benefit corporations.
Public Agency Revenue Bonds (PARBs)

Tax-exempt bond financing for government entities are for projects that enhance infrastructure, or the economic, social or cultural quality of life for residents in the community or State.
Exempt Facility Bonds
Tax-exempt financing for projects that are government-owned or consist of privately used or leased facilities on public -property; such as private airline improvements at publicly owned airports, ports, water facilities and other private enterprises that serve the general-public.

What are the benefits of conduit bonds?

  • Conduit bonds may be used to issue tax-exempt obligations. This reduces the cost of financing
  • A conduit bond offering can have both tax-exempt and taxable portions
  • A conduit bond may only be issued on behalf of a public agency or 501(c)3 non-profit, except for Industrial Development bonds (IDBs)
  • IDBs are the only conduit bonds available for commercial borrowers
  • Conduit bonds can be issued either as a private placement or a public offering

What are the benefits of doing business with IBank?

Infrastructure State Revolving Fund Program (ISRF)

  • Below-market interest rates
  • ISRF finances a wide range of projects (excluding housing)
  • Applications continuously accepted
  • Non-competitive application process
  • Technical assistance
  • No matching fund requirement. May serve as matching funds for other financings
  • No federal overlays
  • Closings are tailored to project requirements

Bond Financing Program

  • Competitive application and issuance fees
  • Applications are continuously accepted
  • A single TEFRA (Tax Equity and Fiscal Responsibility Act) hearing
  • Technical Assistance
  • Closing in a timely manner

Jump Start Loan Program
IBank’s Jump Start Loan Program helps low-wealth entrepreneurs in low-wealth communities start, grow, and thrive. Jump Start provides technical assistance, financial literacy training and microloans from $500 to $10,000.
The funds can be used for a variety needs, including (but not limited to):

  • Start-up costs
  • Property
  • Buildings
  • Machinery
  • Equipment
  • Inventory
  • Tenant Improvements

To apply, reach out to a Jump Start FDC on the Small Business Finance Center page of the IBank website.

California Small Business Loan Guarantee Program (SBLGP)
IBank’s SBLGP helps lenders provide loans to small businesses, farmers and exporters that may not otherwise qualify if it were not for the guarantee.
IBank partners with Financial Development Corporations (FDCs) to guarantee loans up to 80 percent, to encourage lenders to provide funds to small businesses.
The funds can be used for a variety needs, including (but not limited to):

  • Start-up costs
  • New construction
  • Inventory
  • Working capital
  • Franchise fees
  • Business expansion
  • Lines of credit
  • Gap financing
  • Farming

How does IBank partner with Financial Development Corporations (FDCs) for the California Small Business Loan Guarantee Program (SBLGP)?

IBank issues loan guarantees in partnership with seven partner Financial Development Corporations (FDCs) located throughout the State. Potential borrowers may contact FDCs directly to apply for a loan through participating financing institutions, credit unions, or Community Development Financial Institutions (CDFIs). For more information, please click here.

Are there any restrictions on what IBank can finance?

IBank cannot finance housing. All projects must be located in California. All financing applications are subject to Board approval.

When are IBank Board meetings?

Board meetings are typically on the fourth Wednesday of each month, but may vary. The meeting schedule is on IBanks website under the Board meetings tab.

When are the deadlines for submitting applications?

Application deadlines are under the Board meetings tab here.

Who are the representatives on IBank’s Board?

The IBank Board consists of five members: The Director of the Governor’s Office of Business and Economic Development (Go-Biz), the State Treasurer, the Director of the Department of Finance, the Secretary of the Transportation Agency or designee of each of the forgoing and a Governor’s appointee.

Who is responsible of IBank’s day-to-day operations?

The Governor appoints an Executive Director to manage IBank’s day-to-day operations who works with an Executive Team.