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Danbury Hospital
CCSU Residence Hall

Tax-Exempt Equipment Loan Program (EasyLoan)

CHEFA provides a tax-exempt financing alternative for the purchase of capital equipment and associated improvements. The program features an abridged application process, standardized loan documentation, and reduced financing fees compared to a traditional bond financing. The issue is privately placed with one lending company.

The EasyLoan Program utilizes a secured equipment loan structure where the commercial lender will loan the money, through the Authority, to the institution, and take a lien on the equipment and other financed improvements as collateral.

Who Can Borrow

The program is available to eligible not-for-profit, tax-exempt organizations for which the Authority currently has authorization to issue bonds. See Eligible Institutions under Eligibility. 

Amount and Term of Financing

An institution under this program may finance purchases from $2,000,000 and up for terms ranging from five to ten years. The maturity of the loan will be determined by the useful life of the equipment financed and/or by the investor (the Lender).

Typically, the larger the amount to be financed, the more investor interest will be generated. Attracting as many investors as possible will potentially result in more favorable interest rates and financing terms.

What Can Be Financed

Eligible equipment includes, but is not limited to, the following.

  • Medical, diagnostic and laboratory equipment
  • Computer networks and equipment
  • Telecommunications equipment
  • Vehicles
  • Furniture
  • Energy-management systems

Renovations associated with equipment installation may be financed as part of the project as long as these expenses do not exceed 25% of the overall financing amount.

Program Fees

The Authority charges a one-time fee of 0.10% of the amount to be financed for borrowers who have a bond financing with CHEFA. For borrowers who do not have a CHEFA bond issue outstanding, the fee schedule is as follows.

 Par Amount of LoanFee Amount
      Up to $3,000,000$  5,000    
      $3,000,000 to $6,000,000$10,000    
      Over $6,000,000$15,000    

Transaction costs typically range from $35,000 to $60,000 depending on the size, term and complexity of the issue. Other financing fees may include Borrower's Counsel, Lender's Counsel and the Lender's commitment fee, if applicable.

EasyLoan Financing Schedule

Typically, the length of time to complete an EasyLoan financing is 8 to 12 weeks, depending on the complexity of the issue and the details of the project.

Approval Process

Under the Program guidelines, for loan transactions under $5 million, Authority staff is authorized to proceed without approval from its Board of Directors. Any transaction over $5 million is subject to review by the Board, and any transaction over $10 million requires formal approval by the Authority's Board of Directors.

Selection of Lender

The Institution has the option of bringing in their own Lender, or CHEFA can conduct a Request for Proposal (RFP) for a Lender.

Once the application is received, the Authority's Staff will assemble and distribute a bid package to potential investors which includes information regarding the borrower, the equipment to be financed, the term of loan and timeline for the financing.

We typically allow one week for investors to submit their proposals. Once all proposals are received, the Authority will compile an analysis detailing the results of the bid and review the results with the institution for its selection of the investor that offers the most favorable interest rate and terms.

Once an investor is selected, the investor will conduct a final credit approval of the institution before issuing a final commitment. This usually takes approximately ten business days to two weeks.

Application Process

The institution will be required to complete an application which requires the following:

  • A description of the institution, the equipment to be financed and the desired term of the loan.
  • Selected financial and demand data for the past five fiscal years and the most recent year-to-date.
  • Reimbursement and Authorizing Resolutions - The governing body of the institution must adopt an Authorizing Resolution, which approves the project for financing. A Reimbursement Resolution must also be executed to ensure that any funds expended by the institution on any equipment purchases or renovations prior to the delivery of funds will be eligible for reimbursement. A sample form of the resolutions will be included with the application.