What is a non-appropriation clause and why is it needed?
With a lease-purchase Agreement, a non-appropriation clause enables the lessee to account for the lease obligation as a current expense instead of debt and to terminate the lease agreement at the end of the current appropriation period without further obligation or penalty. This may be done only in cases where the lessee was unable to obtain funding for future payment obligations on the lease. Typically, the clause will contain a 'best efforts' requirement whereby the lessee must use its best efforts to obtain the necessary appropriation for the lease payments.
Related FAQs
Any personal property equipment or real property essential to the operations of the...
For a detailed quote, please call Sparta Commercial Services, Inc. on our toll-free line: +1 (800)...
A municipal or tax-exempt lease agreement allows a political subdivision to use its annual...
The Basic Steps of the Financial Process are:
Obtain quote for equipment from qualified vendor
Credit...
Title may either be retained by the lessor until all payments have been received or may be granted to the...
With a lease-purchase Agreement, a non-appropriation clause enables the lessee to account for the...
When acquiring financing for any asset acquisition decision, the principal financial objective is...
Tax-exempt leasing is one of the simplest and most successful ways to purchase essential equipment and...
We take great pride in ensuring your leasing experience is easy. Lease purchasing is much easier...
For the lease to qualify for the interest exclusion, a lessee under a tax-exempt lease must be a...
Fire Dept. Equipment
Municipal Needs
Police Equipment
Municipal Leasing Benefits
- It's Affordable.
- No large, up-front cash outlays
- Competitive interest rates
- Finance Up to 100% of the project cost.
- Preservation of capital.
- Assets can be financed over their useful life.
- Locked in fixed rate for the term of the lease.
- Simplified documentation.