Government

 The use of lease-purchase financing by state and local finance officers has increased substantially over the last several years because of the flexibility of the lease-purchase as a financing instrument, and the ability to spread the cost of the equipment or capital asset acquisition over a period of time.

 

The Lease-Purchase Agreement is in effect an installment purchase agreement whereby the city or county makes periodic lease payments of the principal and interest. Upon receipt of the final payment, a bill of sale is released to the city of county, free and clear of any lien or security interest.

The Lease-Purchase Agreement can be set on monthly, quarterly, semiannual, or annual payments. This flexible payment mode will allow the city of county to plan their budget appropriations. The lease purchase agreement is also subject to annual budgeting appropriations. The city and county has the right to terminate the lease if non-appropriation for the equipment being leased should occur.

BENEFITS:

Solution to Your Capital Budget

  • Lease payments can be structured to meet budget constraints through flexible payment modes and lease terms.

Cash Conservation

  • Leasing provides 100% financing and structured payments conserve cash.

No Debt Created

  • Since the lease payments are subject to annual appropriations, no long term debt obligation is created.

No Voter Referendum

  • A properly structured lease purchase agreement does not constitute debt under most state constitutions; therefore, no voter referendum is required to enter into a lease contract.

Alternative Source for Funds

  • Leasing leaves other credit lines untouched and available for daily operations.

There Are No Surprises

  • Leasing offers competitive fixed rates with set payments structured to meet your capital budget needs with simple, straightforward documentation. No additional costs. No hidden fees.

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