More Than $12.65 Billion for Business Development
The LPFA has issued over $12.65 billion in private activity bonds and IDBs to finance more than 565 projects that have generated thousands of construction and permanent jobs in the state.
More Than 8,000 Jobs per Year Generated Through the LPFA
In an economic impact study conducted for the LPFA, leading economist Dr. James Richardson states that the LPFA’s activities in our first 25 years "have led, on average, to an additional 8,333 jobs per year and additional personal earnings of $158.6 million per year for the Louisiana economy.”
Types of Projects
Tax-Exempt Revenue Bonds may be issued for companies or projects within the parameters of current Federal law, mainly companies building or acquiring facilities used to manufacture tangible personal property and other related facilities, and for exempt facilities and nonprofit 501(c)(3) entities. Tax-exempt proceeds from bonds can be used to finance such projects as manufacturing facilities, multifamily housing facilities, airports, sewage waste facilities, mass commuting facilities, environmental enhancements, nonprofit hospitals, colleges and universities, and assisted living facilities. No more than 25% of the tax-exempt bond proceeds can be used for the purchase of land, and other restrictions will apply.
The eligibility for Taxable Revenue Bonds is much less restrictive. Taxable bond proceeds can be used to finance any economic development facilities and activities.
Here's how it works: you do not borrow money from the LPFA, you borrow money through the LPFA. The LPFA has the legal ability to issue bonds which are -- in essence -- a loan agreement between you and the buyers of the bonds. The bond buyers are loaning you their money with the bonds serving as a sort of IOU. You use the bond buyer's money to build or expand your business and repay them out of the revenues your business generates.
In its publication "An Investor's Guide to Tax-Exempt Securities," the national Public Securities Association describes these bonds as follows: "These bonds are issued by state, certain agencies or authorities, a local government body or development corporation to finance the construction or purchase of facilities and/or equipment to be leased to a private corporation. These bonds are backed by the credit of the private corporation rather than the credit of the issuer, although the economic and financial strengths and weaknesses of the issuer may be taken into consideration in evaluating the creditworthiness of the bonds. The bonds are issued for a host of purposes ranging from economic development for job creation to housing, health care, mass commuting facilities, airports, and sewage and solid waste disposal projects, among others."