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Another major advantage of IDB mini-bond financing is flexibility in repayment terms. "Sure, my mini-bond gave me the money I needed for expansion, but it also allowed me to pay over a much longer period of time than any commercial bank would allow," says Golterman.

The Finance Authority of Maine, which has followed the St. Louis mini-bond model, offers IDB borrowers a choice of amortization terms and payment structures. "That is particularly important given the current business climate, where keeping debt service under control is a priority," says David Markovchich, director of business development for the Authority. "Cash flow is particularly important to manufacturers in a down cycle."

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This article was originally published in the January 2002 print edition of Entrepreneur with the headline: Itsy-Bitsy Bonds.

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