March 31, 2017
Champaign, IL – The Federal Reserve recently lifted its fed funds rate another quarter point for the second time in just four months. Simply put, this determines the interest rate at which banks can borrow money on a short term basis. These increases are generally passed on to consumers and businesses through higher rates on their borrowing. The Federal Reserve raised rates in December 2015 and December 2016, and it is widely expected for them to make more increases in 2017.
“Get ready to pay more for your borrowing. This will have a domino effect across the country and will push up rates for small businesses.” says EIEDA Executive Director Andrew Hamilton.“If you have capital expansion plans and are eligible you may want to consider low-interest tax-free bonds. The interest rate is typically 1.5 to 2.5 percent lower than a conventional bank rate and the average borrower takes out $1.5 million to $5 million.”
EIEDA has the unique power to issue bonds that are exempt from BOTH State and Federal income tax and are called Double-Barreled bonds. Manufacturing companies, not-for-profits and affordable housing developers are eligible for these types of bonds. Some of the first projects EIEDA funded were for housing developers to build and affordable housing projects in Champaign County.
“EIEDA has $38.1 million available for housing deals in our ten county region”, said EIEDA Chairman Mitch Swim. “he housing bonds can also help the developer obtain tax credits for their project, further increasing its feasibility.”
EIEDA, created 2005, is a bond financing agency that has facilitated over $119,000,000 and created over 280 jobs in the ten county region of Champaign, Coles, Douglas, Edgar, Ford, Iroquois, Moultrie, Piatt, Shelby and Vermilion Counties”. For more information contact Andrew Hamilton, Executive Director, Eastern Illinois Economic Development Authority (EIEDA), Tel: 866-325-7525, email: firstname.lastname@example.org