Municipal Funding
The Municipal Funding Program is designed to give you a competitive advantage in the field. Due to favorable income tax laws we can offer rates for qualifying entities that are drastically lower than standard equipment financing rates. We understand that most municipal projects are RFP or bid scenarios. In that environment being able to price yourself competitively is paramount. This program can give you the advantage to compete and win!
Who Qualifies?
The issuer of a tax-exempt obligation, including a tax-exempt lease, must be a State or possession of the U.S., the District of Columbia, or a political subdivision thereof. Political subdivisions include cities, towns, counties and other municipalities. They may include other state entities such as school districts, special purpose districts (fire, parks, utility, water, etc.), hospitals, agencies, authorities, boards and commissions.
Not-for-profit organizations created under Section 501 (c) (3) of the Internal Revenue Code do not qualify directly as issuers of tax-exempt obligations but may be eligible with a sponsoring governmental unit. Not-for-profit organizations benefiting from tax-exempt leasing include:
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Health Care (Hospitals, Clinics, Nursing Homes, Life Care Centers)
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Education (Colleges and Universities, Preparatory Schools)
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Museums
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Research Centers
How Are Tax-Exempt Leases Structured?
Tax-exempt leases are structured as a series of one-year renewable obligations that are subject to the governmental entities ability to appropriate funds for the continuation of lease payments. Payments constitute a current expense of the lessee and, in the event that sufficient funds are not available for payment, the agreement is terminated and the equipment is delivered to the lessor. Title may either be retained by the lessor until all payments have been received or may be granted to the lessee at lease inception. In most cases it is preferable to pass title up front to avoid any potential tax issues.
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