In today’s economic environment, most public sector organizations are faced with increasingly tight operating and capital budgets. Many municipalities have a backlog of capital replacement needs and budget constraints making lump sum purchases difficult. Municipal Lease Financing from MLC allows you to increase your buying power by purchasing at today’s prices while stretching out tightly budgeted money over several fiscal years. Read about how MLC is Empowering America >
Details About Municipal Lease Financing
• Tax-exempt Lease/Purchase Agreements are the most common public sector financing alternative to traditional debt financing (bonds, loans etc.). A Tax-Exempt Lease/Purchase agreement, also known as a municipal lease, or an installment purchase agreement is used to acquire personal and real property.
• Payments are generally level and are tied to the useful life of the equipment or to match the cash flow savings of an energy project. Interest rates are lower than those on a taxable commercial lease purchase agreement because the interest paid is exempt from federal income. In addition, a tax-exempt lease/purchase agreement does not constitute a long-term debt obligation because of the non-appropriation language included in the agreement.
• This language limits the payment obligation to the current operating budget period. If future funds are not appropriated, the equipment is returned to the leasing company. All manufacturer or vendor warranties are passed to the Lessee under the agreement. Equity builds up with each payment with full ownership at the end of the lease term, typically for $1.00. Title passes to Lessee at inception with the Lessor holding a security interest.
About the Lease Agreements & Participants
• Lease/purchase agreements are used to finance everything from technology projects, telecommunications systems, highway equipment, fire, rescue and emergency equipment to jail cells. They are ideal for financing energy and water projects.
• Participants can include any state or local government or political subdivision, including state agencies, cities, towns, counties, school districts, fire districts and volunteer fire departments, hospitals, water and sewer districts, qualified 501(c)(3) entities, and many other municipal authorities.
• When funding must be obtained quickly and economically, leasing is often the perfect solution. Leasing also helps avoid the time, expense, and uncertainty of bond issues. Equipment can be delivered in phases while benefiting from consistent lease rates.
• Lease financing may be obtained by requesting a bid/quote for the equipment as separate items or as one package. The bid/quote can thereby be customized to provide the most economical equipment and financing for your unique needs.
Leasing has become an attractive and financially viable option for many municipalities. As they face revenue shortfalls, leasing provides effective solutions to acquire a variety of equipment, technology upgrades to continue to provide quality public services.
For nearly 30 successful years, MLC - Municipal Leasing Consultants has been a leader in providing innovative financing solutions for municipalities helping local governments get the equipment and projects essential to your community. Read about how MLC is Empowering America >
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MLC has a number of lease financing options that may be right for your upcoming project. Call us today to arrange a consultation.
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