The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.
Qualified Small Issue Bond
A type of Tax-Exempt Bond issued as a Private Activity Bond (PAB) permitted under Section 144(a) of the Code if the aggregate authorized face amount is $1,000,000 or less (or, in certain cases, $10,000,000 or less) and at least 95% of the Net Proceeds of the Bonds are to be used (i) for the acquisition, construction or improvement of land or property of a character subject to the allowance for depreciation in connection with a “manufacturing facility,” or (ii) to redeem part or all of a prior Bond Issue which was itself a Qualified Small Issue Bond. Other general Private Activity Bond rules also apply.
Financing in which the Issuer issues the bonds to finance a project to be used primarily by a third party.