The Benefits Of Taking On A Municipal Lease
One of the biggest challenges faced by the public sector these days are the continually shrinking operating and capital budgets. Because of this, many municipalities and public departments are now opting to look for municipal lease opportunities that will allow them to get the equipment they need to operate daily, without resorting to municipal bonds, loans or tax increases to raise capital for the purchase of much needed equipment outright.
The experts at Sun South Leasing have the ideal financial solutions for you, no matter how tight your operating budget is. Call them today for their advice on arranging a tax-exempt municipal lease for you.
The payments on a municipal lease are more affordable, and are tied to the useful life of the equipment being leased. This kind of tax-exempt lease purchase agreement avoids having a long-term debt agreement, and limits the payment obligation to the current operating budget of the company or government agency that leased the equipment. If funds are not available in the future to continue the lease, the equipment is simply returned, and no further debt is consigned.
Equipment leasing in this manner has been used to finance highway repair equipment, fire rescue equipment, educational programs, telecommunication systems, and even monitoring and security systems for correctional facilities. A municipal lease agreement makes it so much easier for cities, counties and state governments to provide the major equipment needed for the day-to-day expense of keeping their infrastructures functioning smoothly, and avoid having at times controversial voter referendums to garner funding altogether.
Government agencies are not the only ones able to benefit from municipal leasing. Because the equipment lease includes the full purchase price of the equipment, as well as service contracts, shipping costs, and installation fees, a lease purchase is easier to obtain than an equipment loan, has no interest, and requires no down payment. All costs are listed within the lease, no hidden fees, and budgets can be easily accommodated to match the payment amount to the customer. And, it comes with its own tax benefits: a purchase plan that would normally be a part of any business’ overhead that cannot be taxed at all. This type of business leasing, whether for government or private sector, are tax-exempt.
This type of equipment leasing can also work out for organizations that normally operate tax-exempt. By their nature, loans are not always an option, even to purchase needed supplies. Most tax-exempt businesses and charities literally live and die based on funding received through donations or grants. A municipal lease will allow your business to expand and modernize quickly, take advantage of tax benefits at the same time, get you the equipment you need without breaking the budget or spending cash that you do not have.