Municipal Finance

Municipal ﬁnance offers several beneﬁts to government agencies and vendors. State and local government agencies are able to acquire essential equipment and services by means of municipal ﬁnance. While vendors beneﬁt from being able to close more sales. The Lease Advisory Group offers the expertise to make the municipal ﬁnance process easier for both parties.

Capital Lease ($1 buyout)

Considered a lease to own ﬁnance program - The customer purchases the equipment for $1 at the end of a capital lease and the equipment title is then transferred from the leasing company to the customer. A Capital Lease typically allows you to buy the equipment out for a nominal cost, such as $1. Plus a capital lease does not stress your credit as a loan would, which frees up your credit for important day to day activities.

Who qualiﬁes for a tax-exempt municipal lease?

State Governments
Public School Districts
City Governments
County Governments
Public Colleges and Universities
Hospitals, Municipal and 501c3
Fire Districts
Port and Airport Authorities
Water and Sewer Districts
Emergency Service Departments

What type of equipment can be lease-purchased?

Computer Hardware and Software
Fire/Emergency Rescue Equipment
Vehicles and Heavy Equipment
Medical Equipment and Facilities
Construction Equipment
Energy Management Systems
Telecommunications Equipment
Airport Equipment and Facilities
Ofﬁce Equipment
Waster/Water Equipment

How can you beneﬁt from working with us?

One of the reasons Lease Advisory Group are leaders in our industry is because we bring many beneﬁts to our partner
relationships. We can help you in a number of ways:

Detailed Proposals: We provide you with all the data and information needed to produce compelling quotes and proposals.
Proposal Review: We’re able to provide our unique Request For Proposal (RFP) review assistance.
Negotiating of Financing Terms: Our team of seasoned experts will do everything possible to accommodate the speciﬁc needs and requests of your customers.
Financial Information and Documentation: From applications to lease agreements, we’ll handle each step of the process for you – and our documentation is simple and easy to use.
Meetings and Trade Shows: We will accompany you on selected sales visits – on site or via phone – and are available for important trade shows and events.

What are the requirements for using a tax-exempt municipal lease?

There are a number of requirements that government agencies must meet in order to be eligible to use a tax-exempt municipal lease, but here are the main ones to remember:

Transaction must be legal, valid, and binding under local, state and federal laws
Equipment must be essential to government operation
Must be a capital lease, which means the intent is to own the equipment at lease end
Lessee must meet the eligibility requirements of Section 103 of the U. S Tax Code
8038G/8038GC IRS Form must be completed and ﬁled
Entities utilizing tax-exempt municipal lease must have:
1. Power to levy taxes
2. Power of eminent domain
3. Policy powers

What are the beneﬁts of using a tax-exempt municipal lease?

Offer your customer the best economic terms available
Receive full product payment up front as delivered and accepted
Simple process – purchase order, delivery, acceptance same as cash sale
Prompt payment directly from funding source
Close the sale now, rather than waiting for future budgets

Ability to stretch budgets and maximize available capital
No property tax, no sales tax (except AZ, CA and NC)
Lower interest cost, lower debt service = lower payments = lower total cost of ownership
Flexible payment structures (monthly, quarterly, semi-annual, annual)
Voter approval usually not required
Interest rates on transactions signiﬁcantly lower than taxable leases
Asset ownership and control

Lease Advisory Group can also offer a Fair Market Value (FMV) financing structure for all industries as well, if that’s of interest to your clients. This structure acts more like a rental of the equipment versus loan with intent to own. Under this structure the Lessor holds Title to the equipment and can take depreciation beneﬁts as the owner of the equipment. It is also important to note that under these structure sales, and property tax exemptions may not pass through to the Lessor and under the terms of the Lease Agreement the Lessee would be responsible for the reimbursement of such charges.