CECFA Financing 101

Established by the Colorado General Assembly in 1981, CECFA was created to provide cultural and educational institutions with affordable capital financing for their projects through the sale of tax-exempt bonds. We are not a state agency and receive no state appropriations.

We help organizations borrow money. We assemble capital through the sale of tax-exempt bonds. The proceeds of these bonds are loaned to educational and cultural organizations at lower tax-exempt interest rates and can be used to finance the purchase, construction, or renovation of buildings, land, and equipment (capital assets).

Lower interest rates. The tax-exempt interest rates on CECFA loans are about 30% lower than taxable commercial rates.

Nonprofit cultural, intellectual, scientific, historic, athletic, educational, and artistic institutions can be funded through us. This includes public or private, sectarian or secular, and small or large borrowers.

Loans can close in four weeks to four months, depending on the size and complexity of the transaction.

Yes. Many loans extend for 30 years. Repayment schedules can often be structured to meet the anticipated cash flow of the borrower. In some cases, borrowers are able to use bond funds to pay the debt service until the building is placed in service.

Yes. We have a Small Borrower Program for certain loans less than $4 million with significantly reduced fees, streamlined processing, and technical assistance.

No. Borrowers can assemble their own team of experts and consultants. We only require that underwriters and bond counsel be nationally recognized and experienced in tax-exempt financings. Bond counsel must be located in Colorado.

Investment banking firms typically sell the tax-exempt bonds. These firms have substantial expertise in marketing tax-exempt bonds issued by state authorities. In some cases, banks or other sources of capital purchase all of the bonds.

Banks, insurance companies, individual investors, pension funds, and other institutions all buy tax-exempt bonds.

The borrower has the obligation to repay the bonds. Bonds issued by CECFA are not a liability of the State, but must be repaid solely out of the revenues of the entity whose project is being financed.

We are governed by a seven-member Board of Directors appointed by the Governor and confirmed by the Colorado Senate. The staff and advisers consist of an Executive Director, an Executive Assistant, financial advisers, legal counsel, and a legislative liaison.