Advantages of Municipal Lease-Purchase Financing
Bond Election Not Required -
In most cases, a bond election is not required. Because of the annual appropriation feature, tax-exempt municipal
leasing are not counted against the city’s
debt limit, nor are they subject to normal debt incurrence procedures.
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Flexible Terms -
Lease terms generally are matched to the useful life of the property financed. The flexibility of monthly, quarterly, semi-annual, or annual payments provides for easy budgeting and, in most cases,
no down payment is required. Prepayment arrangements can be made.
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Builds Equity -
Unlike rentals, a lease-purchase program permits the municipality to build equity with each payment. At the end of the lease term, the municipality owns the equipment.
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Avoids Inflation Delay Costs -
A lease-purchase obligation permits acquisition of needed equipment today, before prices rise still further. There is no need to build up capital improvement finds until an outright purchase is possible, all the while watching inflation stay one or two steps ahead of purchasing power.
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Debt Limitation -
Unlike other ways of obtaining funds, lease-purchase financing does not affect debt limitations. Debt to fund balance ratios are very important in keeping a good rating as well as staying within statutory requirements.
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Quick Response -
Funds for equipment purchases can usually be made available quickly after the municipality has completed the initial lease application. This is particularly important in times of emergency when bond proceeds might not be available for weeks or even months.
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Emergency Response -
Most state laws allow a governing body to purchase equipment without going through the bid process whenever an emergency is declared. A lease-purchase program provides quick financing for an emergency
purchase.
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State, County, Township, Villages,
Fire Departments, City Governments, and Authorities and Non-Profits as well as manufacturers and equipment vendors can look to
Oracle Equipment Leasing as their Municipal Lease Financing source. Call
800-949-6685for a quote or email us at Lease
Financing
