SIB loans have financed a diverse array of transportation projects including vehicle and ferryboat purchases, parking facilities, multimodal centers, railroads and airport construction. While more than twenty States are able to offer SIB loans to transit projects, only seven have transit loans. As of September 30, 2001, approximately $25 million of Federal contributions to the SIB program have supported public transportation loans. Despite this achievement, a smaller percentage of public transportation projects received SIB assistance compared to other forms of surface transportation projects. Several legal and program obstacles may account for the diminished lending level in this particular transportation sector.

A SIB must enter into an agreement with the Federal Transit Administration to commence transit lending. Among the States with the legal authority to lend to transit projects, two declined to commit capital to a designated transit account. Transit projects must satisfy a relatively more extensive set of Federal regulations, making SIB loans to transit projects a more complex endeavor.

SIB managers indicated that they were not actively pursuing options to develop a more active transit lending level and to solicit more transit projects. Some SIBs do not closely coordinate their outreach activities with transit agencies, and as the sponsoring agency, a transit authority is expected to propose a project and initiate an application. Although one SIB lacked a close relationship with the local transit authority, SIB managers said that they would welcome transit applications.

Identifying suitable projects with a loan repayment source was also cited as a deterrent to developing transit projects. Nevertheless, certain transit enhancements such as bus shelters could claim a unique and dedicated repayment source such as advertising revenue. For example, in Pennsylvania, a loan for an historic preservation of a railroad station combining many transportation modes including local bus transportation will be repaid with revenue generated by station tenants and concessionaires.