Why lease the equipment?

Tax-exempt leasing is one of the simplest and most successful ways to purchase essential equipment and facilities. In addition to qualifying for low interest rates, municipalities can conserve their cash while acquiring the equipment and facilities necessary for their day-to-day operation. Entering into a municipal lease may also be more cost effective because political subdivisions can purchase equipment or facilities at today’s prices, not next year’s price increase. This is in addition to the annual savings realized through decreased maintenance costs.

There are laws in all 50 states that restrict the ability of municipalities to borrow money. There are, however, very few restrictions on the ability of municipalities to enter into a lease. Leases represent a year-to-year commitment on the part of a municipality to make lease payments, not a commitment to pay debt service. In other words, leases are not considered debt and, therefore not subject to the limitations placed on debt by state and local laws.

Related FAQs

• What factors should be considered in deciding whether or not to use a tax-exempt lease?

  When acquiring financing for any asset acquisition decision, the principal financial objective is...

• What types of entities qualify for a municipal or tax-exempt lease?

  For the lease to qualify for the interest exclusion, a lessee under a tax-exempt lease must be a...

• 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...

• How Do I Obtain a Quote?

  For a detailed quote, please call Sparta Commercial Services, Inc. on our toll-free line: +1 (800)...

• Is leasing easy?

  We take great pride in ensuring your leasing experience is easy.  Lease purchasing is much easier...

• What is a municipal or tax-exempt lease?

  A municipal or tax-exempt lease agreement allows a political subdivision to use its annual...

• What can be financed on a tax-exempt basis?

  Any personal property equipment or real property essential to the operations of the...

• Why lease the equipment?

  Tax-exempt leasing is one of the simplest and most successful ways to purchase essential equipment and...

• Who owns the equipment under a tax-exempt municipal lease and how is the equipment titled?

  Title may either be retained by the lessor until all payments have been received or may be granted to the...

• What Are The Financial Process – Basic Steps?

  The Basic Steps of the Financial Process are: Obtain quote for equipment from qualified vendor Credit...

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