FAQ
Frequently Asked QuestionsIs the IBB a bank?
No, the IBB is a quasi-state agency.
Does the IBB receive State tax dollars?
No, the IBB is a self-funded agency.
What is the mission of the IBB?
The IBB assists local government in the process of issuing debt.
What is the benefit of using the IBB?
One of the main benefits of the IBB is that we pool deals together. By combining several smaller deals into a larger one, everyone will benefit due to the economies of scale. The IBB also offers all-inclusive rates, exempts the need to bid financing and is a known commodity within the bond market.
Who uses the IBB?
The IBB assist local and state units of government. We refer to them as “Qualified Entities” and include cities, towns, counties, public libraries, townships, public school corporations, public universities, county hospitals, redevelopment districts, among others.
HELP FAQs
What is the Hoosier Equipment Lease Purchase (HELP) Program?
The HELP Program is a lease financing option available to assist government entities with purchasing essential equipment.
What are the advantages of the HELP Program?
The HELP Program offers many advantages, including competitive interest rates, eliminates the need to bid the financing (IC 5-1.5-8-3(c)), a streamlined one-page application and flexible repayment schedules.
What kind of equipment can be financed through the HELP Program?
The Indiana Bond Bank (IBB) is able to finance essential equipment for an entity, such as police cars, fire trucks, snow plows, dump trucks, computer equipment, and many other essential items. The IBB has declined to fundcertain non-essential items, such as statues and waterslides.Additionally, the IBB is not able to finance permanent fixtures*, including air conditioning and heating units. If you have any questions about whether your equipment can be financed through HELP, please contact the IBB.
Is there a minimum or maximum amount?
No. For leases under $25,000 please contact the IBB directly. Leases over $2,000,000 will require IBB Board of Directors approval prior to closing.
When does the IBB accept applications?
Applications can be submitted at any time.
How long does it take to receive a bid proposal?
The lease providers in our program have asked for 5-7 days to assemble their proposal.
How many HELP providers are in the program?
There are eight banks currently that work with the IBB to provide funding. They are Centier Bank, Chase Bank, Crossroads Bank, Huntington National Bank, Key Bank, PNC Bank, Regions Bank and US Bank.
Am I locked in to using the IBB once a quote has been received?
No. If you are not satisfied with the rate provided or are able to locate a lower rate outside of the HELP Program, we recommend you use the lower rate.
Who provides the documents once the rate is accepted?
Once the rate is accepted, you will work directly with the financing bank. The IBB will be available to provide assistance throughout the process. Please note, that your governing body will need to adopt the paperwork provided by the financing bank prior to closing on the lease.
How long does a closing typically take?
The financing bank can move as quickly or as slowly as you wish. A credit review will be conducted by both the IBB and the financing bank prior to closing.
Can we pay for the equipment before the lease closing?
The lease provider will need to pay your vendor for the equipment, unless your governing body has adopted a reimbursement resolution. Please contact the IBB for additional details.
Who owns the equipment at the conclusion of the lease?
The HELP Program is a lease purchase program. Your entity will own the equipment once the lease has been paid in full.
Community Funding Resource
What is the purpose of the Community Funding Resource (CFR)?
The CFR program provides local governmental units with an alternative financing toolforinfrastructure andother related projects. The CFR is for cities, towns, school corporations, townships, libraries, counties and other local governmental units.
Is the Bond Bank’s CFR a grant or loan?
The CFR is a loan that is paid back in full plus interest through at hird party trustee.
What can be the source of repayment for the CFR?
Entities can borrow against, property taxes, utility revenues, income taxes, TIF and other revenue sources. Please contact your Municipal Advisor to structure the financing that works best for your entity.
When are funds available for the program?
The Bond Bank intends to issue bonds quarterly through the CFR program. Please contact Matt Zimmerman for a timeline of when applications are due and when funding is available.
What is the maximum financing term for CFR?
The Bond Bank can finance your project for ten years or less through CFR. If you need financing for over ten years, please contact Matt Zimmerman regarding other Bond Bank programs.
Is there a limit to the amount you can borrow?
No, but loans over $2 million require additional approval by the Bond Bank’s Board of Directors.
What is the process to participate?
Included in your CFR packet are step by step instructions for participation, including completing a credit application and receiving local approvals. A Municipal Advisor can assist you with those items. The Bond Bankis alsohappy to provide assistance as well.
Do I need a Municipal (Financial) Advisor to participate in CFR?
Yes. Please contact the Bond Bank if you do not have a Municipal Advisor. The Municipal Advisor will guide you through the process of receiving funding through the CFR program.
Do I need bond counsel to participate in the CFR?
Yes. Please contact the Bond Bank if you do not have Bond Counsel. Bond Counsel will provide the legal documents for your governing body to adopt in order to participate in the CFR program.
Fuel Budgeting Program
If I participate in the Indiana Bond Bank’s (IBB) Fuel Budgeting Program (the “Fuel Program”), where would I purchase my fuel?
There is no change to how Entities purchase fuel. The Fuel Program is a financial instrument only. Entities may purchase and pay for fuel from any vendor.
What are the advantages of using IBB’s Fuel Program?
The Fuel Program acts like insurance for your fuel budget. It is designed to protect your budget from rising fuel prices, and provides flexibility in setting this protection. Additionally, the IBB is transparent in the costs of its program. Other fuel providers (i.e. jobbers) may chargehidden costs whenthey fix fuel prices.
When are applications available?
This is an annual program. Applications are typically made available in early September and are due back by late October.
Can I participate in the Fuel Program if I fix my price with my vendor?
If you fix 100% of your fuel price for the entire year, you cannot participate in the Fuel Program. However, you can participate if you bid and set the price each month, or have a portion of your volume that is not fixed with your vendor.
Do I need to send the IBB invoices from my fuel purchases?
No, the IBB does not need this information.
What is NYMEX?
NYMEX stands for the New York Mercantile Exchange. The NYMEX daily average will be different from the pump price or the amount you pay your vendor since it does not include delivery, taxes and other costs. The NYMEX is the index the IBB uses to set the hedge for the Fuel Program.
What is the difference between a cap and a collar?
The IBB will allow you to enter into two different types of hedges: a “cap only” or a “collar”. A cap provides a ceiling, or threshold, where if the price of fuel exceeds the cap/ceiling payments are due from the IBB to the Qualified Entity. There is an upfront premium associated with purchasing a cap. A “collar” is whereby a range is identified and includes both a floor and a cap/ceiling. If the price of fuel falls within the range, no payment is due from either the IBB or the Qualified Entity (except for minimal administrative fees). If the price of fuel exceeds the ceiling, payment is owed to the Qualified Entity. If the price of fuel falls below the floor, payment is owed to the IBB from the Qualified Entity. The IBB with its consultant, Maverick Energy, will be glad to meet with you and walk you through the different options and the mechanicsfor each.
Advance Funding Program
When are funds available?
Funds are available at the end of January; however, the Indiana Bond Bank (IBB) can also provide interim funds on the first business day of the year.
What are the advantage of using the IBB to issue tax warrants for cash flow financing?
The IBB provides savings by pooling your warrants with other entities. Through the pooling process, the IBB will provide a very low “all-inclusive” borrowing rate. Application and cash flow assistance is also available throughout the process. By participating in the Advance Funding Program, entities are not required to publicly bid the financing of their respective tax warrants.
What funds can our entity borrow from?
This program is for entities with a cash flow deficit. You can borrow from any property tax based fund or from tuition support for School Corporations.
How much can we borrow?
Your cash flow projections determine the amount you are eligible to borrow. Typically, it is the lesser of your projected largest cash deficit for the first six months or 80% of your net levy.
When are funds repaid?
Most funds are paid on the last business day of the year depending upon how much is borrowed. In some cases, there will be a payment due on the last business day of June. All funds must be repaid in the same year that they were borrowed.
How do we participate if we have a cash flow deficit?
Applications and cash flow templates are provided in September of each year. Complete both the credit application and cash flow worksheet for the funds anticipate to have a cash flow shortage, and submit to the IBB. Once the submitted documents are reviewed, you will be notified of your borrowing capacity.
Does our entity need local note counsel?
The IBB will provide note counsel and the legal documents for your Board to adopt. Note counsel services are included in the overall interest rate.
When can I apply to the Advance Funding Program?
Applications and cash flow worksheets can be submitted in October for the 2017 Advance Funding Program.
What if we have a cash flow deficit in the second half of the upcoming year?
The IBB also provides a Midyear Funding Program for entities with cash flow deficits in the second half of the upcoming year. Applications will be available in March 2017 with funds available in May or June of 2017.
Interim Loan Program
What is the Interim Loan Program (ILP)?
The ILP is a partnership between the Indiana Bond Bank (IBB) and the United States Department of Agriculture-Rural Development (USDA-RD) to provide interim financing for USDA-RD eligible projects during the construction period.
Who is eligible for an interim loan?
You must meet the guideline set forth by USDA-RD, which can be found at www.rd.usda.gov, and fall under the definition of a “qualified entity” as defined by I.C. 5-1.5-1-8.
When am I eligible for an interim loan?
Eligibility is based on receiving both a USDA-RD Letter of Commitment and Take-out Letter,and having local approval in place
Why is interim financing necessary?
USDA-RD’s financing begins at a project’s substantial completion. The IBB is able provide interim financing for the construction period, until USDA-RD’s financing begins.
When does the IBB accept applications?
Applications are accepted on a rolling basis. Therefore, you may submit applications at any time.