Services | Equipment
Tax-Exempt Lease/Purchase
Equipment manufacturers, vendors, leasing brokers and municipal officials rely on MFC’s responsive and knowledgeable financing specialists to strategically structure and fund municipal equipment needs.
Whether the financing takes the form of a loan, lease/purchase or installment/purchase agreement, below are some important details about our equipment and facilities financing program.
General Criteria
Financing is a tax-exempt obligation under Section 103 of the Internal Revenue Code.
Financing may apply to any form of equipment, facilities or real property improvements that are essential to the operations of the public agency.
Useful life of the financed property exceeds the financing term.
Creates general or special fund obligation of the public agency.
Cost And Flexibility
Credit approvals within 7 days.
Funding within 30 days.
One point of contact to facilitate financing.
Interest rates may be held firm for up to 90 days, if required.
No costs of issuance other than the legal/document review by the public agency’s general counsel.
No ongoing administration fees apply.
Financing terms range from 3 to 20 years.
Financing amounts range from $50,000 to $10,000,000.
Flexible prepayment provisions are provided.
Financing may be either escrow funded or structured as a capital credit line.
Requirements of Public Agency
Credit qualify by submitting annual audit reports for last three years and current budget.
Obtain authorization of governing body of public agency to enter into financing agreement.
Obtain legal opinion on financing documents from public agency general counsel.
Enter into acquisition/construction contracts with vendors/contractors and authorize payments.
Legal Requirements
Public agency qualifies as a political subdivision within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended.
All constitutional and statutory steps have been taken to enter into the financing agreement.
Public agency assumes risks/rewards associated with ownership of the financed property.
About Our Services
At Municipal Finance, our services are highly personalized and always reflective of the responsibilities associated with public transactions. Each of our professionals has vast and diverse experience in creating comprehensive financing strategies.
What Are The Usual Forms Of Financing?
Depending on any constitutional debt limitation and statutory authority pertinent to the agency, the financing may take the form of either a lease/purchase, loan or installment sale agreement. In any instance, the financing will be structured as a fully-amortized obligation. The agency assumes all risks associated with the use and ownership of the property being financed.
What Can Be Financed?
All forms of essential use, governmental purpose property or infrastructure including:
Public Buildings, Schools, Modular Buildings
Fire Stations, Fire Trucks & Rescue Equipment
Police Stations & Police Cars
Schools & School Buses
Computer Systems & Software
Telephone Systems
Construction Equipment & Communications Equipment
Medical Equipment & Office Equipment
Energy Management Systems & Retrofit Projects
Electrical Generating Equipment
Water/Wastewater Treatment Plants
Water and Sewer Lines & Water Meters
Roads and Bridges
Unimproved Land
How Do Municipal Finance’s Programs Work?
MFC handles all aspects of the transaction, from presentation of financing alternatives to administration of vendor/contractor payments. Documentation preparation, credit review and funding administration are all performed by MFC. This results in sole performance accountability by MFC and limited demands on the agency’s staff.
What Are The General Financing Parameters?
Financing amounts between $50,000 to $10,000,000.
3 to 25 year amortization terms.
Payments structured monthly, quarterly, semiannually or annually.
Flexible prepayment provisions.
What Steps Must The Agency Take?
Provide financial statements and other supporting credit data.
Adopt resolution approving financing.
Solicit document review and legal opinion from agency’s legal counsel.
Authorize the issuance of insurance certificates.
Execute documentation.
Authorize disbursement of payments to vendors/contractors.
Certify to the receipt and acceptance of the property.