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Municipal Leasing

Is there a difference between a Municipal Lease and a Commercial Lease?

A lease typically refers to an arrangement where one party owns or controls equipment, called the lessor, transfers possession and use of that equipment for a period of time to another party, called the lessee, in exchange for the payment by the lessee to lessor of periodic rent (i.e., monthly, quarterly or semi-annually).(ELFA website)

A Municipal lease has a few variations. For example, A Municipal Lease or Lease Purchase is essentially an installment purchase contract otherwise known as a Lease-to-Own program with no residual and no end-of-lease buyout. A municipal lease is renewed annually and as such its payments constitute a current expense of the municipality thereby it does not create debt. Because the interest can be exempt from federal and state income tax, this financing offers the municipality a significant savings compared to conventional leasing.

The Benefits of Leasing:

• Up to 100% Financing
• In certain cases, softcosts can be bundled with the equipment and financed over the term of the lease.
• Preservation of Capital
• No Bond referendum required.
• Finance Assets over their useful life.
• Fixed rate. Lock in the interest rate now.
• Simplified documentation.

Municipal Funding Solutions LLC
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7035 Veterans Blvd, Suite A
Burr Ridge, IL 60527
(630) 533-3337 or Email: dawn@munifs.com

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