Business and Personal Finance Dictionary

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• INDUSTRIAL DEVELOPMENT AUTHORITY (IDA)
  
  Special types of municipal authorities established to promote economic development in their communities. A community establishes an Industrial Development Authority to act as a conduit. The authority can, as a municipal entity, borrow funds or sell securities that are, in most cases, exempt from federal income tax. Consequently, the authority can raise funds at lower interest rates than businesses. The lower-cost funds are used by the authority to buy fixed assets that are then leased to the business. The lease rate reflects the authority’s low cost of capital. See Industrial Development Authority bond.
  
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