Municipal Financing Frequently Asked Questions
We've already paid for the equipment, can we still finance it?
Yes! This can occur in two ways: 1) if the lessee is in the process of completing their lease application and/or contract, they can pay for the equipment/project and seek reimbursement following the completion of the lease documentation; or 2) if the lease paperwork has not been started, to receive a reimbursement of cash, the lessee must first pass a reimbursement resolution declaring official intent to reimburse expenditures with tax-exempt proceeds. Once the resolution has passed, the proceeds of the tax-exempt offering may be used to reimburse expenditures made up to 60 days prior to the declaration of official intent. In any event, the financing must be closed and the reimbursement made within 18 months after the date the expenditure was paid for or the date, on which the property was placed in service, whichever is later.
Questions List
- What is a municipal or tax exempt lease?
- What types of entities qualify for a municipal or tax-exempt lease?
- Does a Volunteer Fire Department qualify for the same rate as a City, County or District?
- Why lease the equipment?
- What is the difference between a municipal lease purchase and a commercial/rental lease?
- Who owns the equipment under a tax-exempt lease and who is responsible for maintenance, insurance and taxes?
- What is a non-appropriation or funding out clause?
- What can be financed on a tax-exempt basis?
- Am I limited to certain types of equipment?
- Can used equipment be financed?
- Is there a minimum amount that can be financed with Municipal Financing LLC?
- Can I include my service or maintenance contract in the financing?
- Can I include money for future equipment purchases in today’s lease?
- Can I make payments via ‘auto draft’ or ACH?
- What are the terms available to municipal entities for financing?
- How does lease-purchase financing differ from bond financing?
- We’ve already paid for the equipment, can we still finance it?
- We are planning to order a truck that will take a year to build, when should we consider financing?
- We have other debt such as bank notes, mortgages or leases, can they be refinanced at the lower tax-exempt rates?
- When the city issued bonds, there were fees involved for underwriting, legal, printing, rating and insurance. Are there fees involved with a lease purchase?
- Can I finance equipment purchased from a variety of manufacturers/distributors?
- When reviewing proposals, what should I do to make sure I am comparing apples to apples?
- What do you mean by tax-exempt financing, our organization is already tax-exempt?
- Does the lessee have the option to pay off a lease prior to the last payment when financing with Municipal Financing LLC?
- If I am a vendor or a broker, can I work with Municipal Financing LLC to establish a ‘private label’ program for my company?
