Financing and Capital Markets

Stretch Municipal Revenues with Equipment Leasing

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Local governments everywhere are dealing with ever-greater budget constraints as they meet the demands for updated technology and address the cost pressures from rising equipment prices.  Additionally, constituent demands to contain tax increases mean smaller budgets and limited cash, leaving school systems to struggle with outdated computer equipment; police departments to depend on aging fleets; and governments to put building renovations on hold.

Local governments, public agencies and school districts do have another option for purchasing the equipment they need. Leases can help governments extend cash and stay within fiscal constraints. Municipal governments can often use tax-exempt municipal leasing solutions to acquire essential-use equipment and facilities. Even better, leases can often be extended to a wide variety of municipal applications.

Key benefits of a municipal lease

Municipal leases distribute costs over the life of the equipment, stretching tax revenues, while conserving cash for other important projects that cannot be financed via traditional financing. Advantages of municipal leases include:

  • Specific voter approval is not required
  • Non-appropriations clauses can allow the borrower to cancel the lease with no penalty at the end of any fiscal period if money is not available for future lease payments
  • Up to 100 percent financing can be available, often with flexible payment plans, to help a municipality stay within budget
  • No underwriting fees along with low legal fees and other expenses for a lower net cost than with bond issuance
  • Capital dollars are preserved for projects that cannot be financed through leasing
  • A municipality can own the equipment at the end of the lease

Financing for many goods and services

Municipal leases have far-reaching applications that go beyond conventional equipment. For example, you can use tax-exempt leasing to fund:

  • Telecommunications infrastructure systems
  • Energy management systems
  • Software
  • Medical equipment
  • Facilities such as courthouses or correctional facilities
  • Video equipment
  • Training and maintenance
  • Leasing can provide the flexibility you need to address your municipality’s financial pressures.

    See how municipal leasing you help you meet your budget

    Contact a local SunTrust Institutional and Government professional today.

    This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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