Why a Municipal Lease?
- While bond issues are an important financing tool, municipal leases (MLs) offer a low-cost flexible option.
- Municipal lease payments are subject to annual appropriation and so are usually not treated as debt. Choosing an ML avoids a time-consuming and potentially costly election.
- Municipal lease financing enables you to acquire what you need when you need it and spread the cost over the useful life of the asset.
- Interest rates for an ML are locked, providing a predictable payment for your budget. Interest rates are also federally tax exempt to investors, resulting in a lower interest rate to you.
- Down payments are not required, providing you the ability to finance 100% of the asset by using a flexible financing structure that best serves your needs in each situation.
- Documentation for an ML is much simpler and straight forward, resulting in far lower legal costs.
- And, at the end of the lease, ownership.