This paper presents a method for solving the linear semi-implicit immersed boundary equations which avoids the severe time step restriction presented by explicit-time methods. The Lagrangian variables are eliminated via a Schur complement to form a purely Eulerian saddle point system, which is preconditioned by a projection operator and then solved by a Krylov subspace method. From the viewpoint of projection methods, we derive an ideal preconditioner for the saddle point problem and compare the efficiency of a number of simpler preconditioners that approximate this perfect one. For low Reynolds number and high stiffness, one particular projection preconditioner yields an efficiency improvement of the explicit IB method by a factor around thirty. Substantial speed-ups over explicit-time method are achieved for Reynolds number below 100. This speedup increases as the Eulerian grid size and/or the Reynolds number are further reduced.