International Municipal Lease Program
In spite of ever-tightening budgets, municipalities must deliver required services for their constituents. Unfortunately, many cities and townships throughout North America struggle to meet these needs due to a lack of financing. Newer trucks are needed to expand fleets or replace outdated equipment.
For many, the solution is International Finance Group’s exclusive tax-exempt Municipal Lease Program. This program helps the public sector purchase necessary equipment without exceeding their budget. Because it serves as a lender to municipal borrowers, the International Finance Group can pass on significant tax savings, in the form of lower interest rates, to its government customers.
All issuers that qualify under Section 103 or Section 501 (c)(3) of the Internal Revenue Code are eligible. In many cases, the lower interest rates and flexible payment terms mean municipalities can purchase more equipment under the same budget. Maintenance costs are decreased. Uptime is increased.
Here’s How It Works
- A city, county, state, school district, hospital, public university, or other government entity purchases equipment over the course of its useful lifespan, and then owns the equipment at the end of the lease term.
- A Municipal Lease has characteristics similar to a loan and can be paid off early—but is still documented as a lease.
- Payments are typically set up annually to coincide with the government agency’s budget cycle. A term is selected (typically between 2 to 12 years), and the government agency builds equity with every payment. At the end of the term, the agency can purchase the equipment for $1.00.
- Flexible payment structures can be tailored to specific budgetary plans: Zero down payments, skip payments, back loaded payments, front loaded payments, or payments in arrears are just a few of the options. We also offer balloon payments to help with cash flow.
- Also, no debt is created thanks to a non-appropriations clause included in every lease--which means voter approval is generally not required.
