California Industrial Development Financing Advisory Commission
Equipment Only Purchase Program (EOPP)
Program Objective
The Equipment Only Purchase Program (EOPP) is a streamlined financing process to provide for the issuance of small bond amounts to finance the purchase of equipment. EOPP's are usually from $1.0 to $2.0 million in size. Due to the fixed costs associated with bond financing, projects for small dollar amounts are usually not as cost effective and can require Borrowers to advance large sums of up front payments.
Minimum Requirements
- Maximum dollar amount of EOPP financing – The maximum amount of tax-exempt financing is $2.0 million or less annually per Borrower. A Borrower cannot apply to both the EOPP and the CIDFAC-IDB Program in the same year.
- Job Ratio – Applicants must establish that the project will result in job creation. [Section 20.V.A.5 of CDLAC Procedures]
- Permits – The Borrower must provide documentation of the applicable discretionary use permits and approvals from federal, state, or local planning agencies for the proposed project at the time of Application. Borrowers are not required to have obtained ministerial approvals at the time of Application.
Application Process
The Issuer must submit a completed Application form and supplemental material in a manner prescribed by CIDFAC for each project requesting allocation on behalf of the Borrower. All questions set forth in the Application must be answered completely and accurately. Each Application must be accompanied by the required documentation outlined in the Application. Only complete Applications with original signatures will be accepted.
Each application must include:
- A complete signed EOPP Application.
- Financial Statements for the past three years.
- Certified Minutes of TEFRA hearing.
- Local Inducement Resolution.
- Qualified Institutional Buyer (QIB) bond purchase commitment or a letter of credit.
- Borrower completed Legal Questionnaire.
Ongoing Allocation and Funding Process
Funding of projects is contingent upon state and local government approvals. These approvals are outlined below:
- California Debt Limit Allocation Committee (CDLAC) approves a general allocation for CIDFAC's EOPP.
- Use of the allocation is for specific EOPP projects.
- Funding is contingent upon CIDFAC Authority approval.
Eligible Projects for Financing
It is the activity or "use" for which a project is acquired or built, and not the company, which determines the eligibility for financing. A company whose major activity is not industrial may qualify if the activity for which the application is filed is industrial.
Eligible projects include:
- Industrial projects for assembling, fabrication, manufacturing or processing which creates a product for resale.
- Projects which manufacture or process recycled or reused products and materials.
- Agricultural projects that process raw products for resale.