Tax-Exempt Municipal Financing

Leverage your Tax-Exempt Status

Municipal financing is offered to state and local government municipalities as a vehicle for acquiring assets through a tax-free municipal lease offering. The lease payments include the return of principal and interest, with the interest exempt from federal income taxation. This tax savings is offered to the agencies in a lower interest rate. A municipal lease is frequently the least expensive method of financing equipment.

The other 2 key differences in municipal financing

  • In a municipal lease, title of the equipment occurs immediately. The financing is a full payout with no residual or balloon payments at the end of the lease
  • The Municipal Lease provides for termination without penalty for non-appropriation of funds by the Government Agency. It is like a loan with an annual out clause

Keys to a Better Purchase Program

This is not a traditional purchase program.  It is specifically designed for public entities with their legal requirements.  If you think your agency cannot participate,  please watch the video to learn more.

Here are the highlights:

  • Non-Appropriation clause included.  Think of this as an annual out clause and as a result, voter approval is not required.
  • This program maximizes budgets.  The total asset cost doesn't need to fit into the budget, just the annual payments, which can multiply purchasing power by 5 times!
  • Simple and fast same day approval process.
  • Zero down, no payments upfront.
  • No debt created so you can pay with the operating budget.
  • Ownership of asset takes place up front.  No residual or buyout at the end.

Frequently Asked Questions

Why choose municipal financing?

Quick Delivery: Municipal financing allows a Government Agency to obtain needed equipment immediately without waiting for voter approval through a bond issue. This increases productivity and reduces time and expenses associated with any bond issuance.

Non-Appropriation: This clause is unique only to the municipal lease. If for any reason the government agency does not have funds appropriated for the annual payments, they can terminate the lease without penalty.

Soft Costs Included. 100% of equipment as well as site preparation, installation, training and maintenance can all be included in the lease. Because the acquisition costs are spread over multiple fiscal years, a municipal lease removes budgetary constraints and allows for 3 times more purchase power. More units can be purchased and/or accessory upgrades installed.

Ownership: The agency takes ownership of the equipment on day one. There is no buy-out or residual at the end of the term.

Flexible Payment Options: The payment is tailored to suit the needs of each Government Agency we work with. Annual, semi-annual, quarterly and monthly payment intervals are available with terms extending to 10 years if needed.

Nothing Down: For the majority of municipal financing plans there is no down payment or security deposit required. NCL can also offer a delayed payment offering so that the first payment is deferred up to one year from the date of purchase.

Who is eligible for Municipal financing?

A Municipal Lease is only available to States and their county and city subdivisions. Departments or agencies such as state universities, fire and police departments, school districts, sanitation, hospitals, or special districts may also be eligible.

What types of equipment/assets can be financed?
  • Telephone and Communications Equipment
  • Heavy Equipment
  • Office Equipment
  • Outdoor Turf
  • Playground Structures
  • Computers and Software
  • Furniture
  • Surveillance Equipment
  • Vehicles and Accessories
  • Heat/Air Conditioning Equipment
  • All equipment or assets essential to the government function

How does the process work?

If your agency or municipality is interested in municipal financing options or want to learn more, please call us at 866-763-7600. We are always here to answer any questions you have. When you are ready to move forward, we can prepare and forward documents the same day for review.