Working with a key financing partner like a development financing agency can provide businesses with the innovative options they need to put their projects in motion.
By Jean Carter Ryan
Financing a major development project always comes with a unique set of challenges. Developers need to find competitive and creative options to ensure they're meeting their return on investment goals, and that's not always an easy task.
Many businesses think their financing options are confined solely to bank loans and commercial mortgage funding, but working with a key financing partner like a development financing agency can provide businesses with the innovative options they need to put their projects in motion.
What is a development financing agency?
There are organizations across the country that are specifically designed to work on projects that facilitate economic development activity by working in the space between public funding for public projects and private investment. They're known as development financing agencies, and in Ohio, this includes port authorities which can act as public financing agencies, facilitating both private and public projects.
Businesses can access financing from development financing agencies for projects that are designed to contribute to the overall growth of a community. Many businesses can qualify for funding-the qualification is really based on the type of project being completed. Financing agencies can help fund capital improvements such as:
Energy improvements to existing facilities
Projects like the ones listed above can be expensive, so financing agencies focus on providing financing options that are long-term, typically between 10 and 20 years, helping to keep costs down and improving cash flow.
How your project can benefit?
Another characteristic that sets development financing agencies apart is our ability to act in cooperation with governments and other organizations, such as traditional banks, that provide funding. The Finance Authority staff and our team work as the intermediaries to find which funding opportunities can be combined to create a financing package that provides the most value for a business.
Together, these parties work to create financing packages that are comprised of one or more funding options such as bonds and capital lease structures. Many times our packages are the most cost-effective way to fund a project. Development financing agencies can also open access to:
Tax-exempt markets (for manufacturers and 501(c)(3) non-profits)
Credit-enhanced financing for projects (for project-related infrastructure)
Variable or fixed rate long-term financing
As independent agencies, finance authorities' (aka: port authorities) unique standing allows us to be nimbler and move quickly. Once a financing package is created and all the parties agree to terms, the financing team can act swiftly to turn the plan into a reality.
It can take a collaborative effort to secure funding for projects that spur economic development, but there are options for businesses that are able to identify the right partners. Working with a development financing agency can be a vital tool for getting a project off the ground.
Jean Carter Ryan is president of the Columbus-Franklin County Finance Authority, which provides long-term financing to businesses, nonprofits and local governments.Since its inception in 2006, the Finance Authority has provided more than $1 billion in financing and has been awarded a BBB+ bond fund rating from Standard & Poor's Rating Services.