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	Fire Truck and Fire Station Financing
	Terms 2 years to 15 Years
	Tax Exempt Leases for Municipalities
	501c3 Non Profit Leasing
	Annual Payments in Arrears for Fire and Police Departments and Cities, Towns, States, Villages, Boroughs, Authorities
	Lease Purchase Leases with $1.00 Buyout
	Fire and Police Vehicle Financing
	School Bus Leasing
	Leases from $25,000  to $20,000,000.

1. How are tax-exempt leases structured?
   A tax-exempt lease or lease-purchase agreement is an installment purchase, conditional sale or lease with an option to purchase for nominal value. It may also be referred to as a municipal lease.
   Tax-exempt leases are structured as a series of one-year renewable obligations that are subject to the governmental entities ability to appropriate funds for the continuation of lease payments. Payments constitute a current expense of the lessee and, in the event that sufficient funds are not available for payment, the agreement is terminated and the equipment is delivered to the lessor.

2. What is a non-appropriation clause?
   
   A non-appropriation clause enables the lessee to terminate the lease agreement at the end of the current appropriation period without further obligation or penalty. This may be done only in cases where the lessee was unable to obtain funding for future payment obligations on the lease. Typically, the clause will contain a 'best efforts' requirement whereby the lessee must use its best efforts to obtain the necessary appropriation for the lease payments. The non-appropriation clause enables the lessee to account for the lease obligation as a current expense instead of debt.

3. What is a non-substitution clause?
   
   A non-substitution clause maintains that if a lease is terminated for non-appropriation, the lessee may not replace the leased equipment with equipment that performs the same or similar functions.

4. Who owns the equipment under a tax-exempt lease?
   
   Title may either be retained by the lessor until all payments have been received or may be granted to the lessee at lease inception. In this case, the obligation is secured by a 'perfected' first security lien on the equipment. In most cases it is preferable to pass title up front to avoid any potential tax issues.

5. Who is responsible for maintenance, insurance, property tax and other operating expenses?
   
   A tax-exempt lease is a 'net lease,' which means that the lessee is responsible for these types of expenses. However, the lessee may contract with the equipment supplier to provide maintenance and other services. These costs may be included in the financing.

6. What is the maximum finance term?
   
   The term of the lease may not exceed 120% of the average reasonable expected economic useful life of the property or project being financed.

7. How is tax-exempt lease financing arranged?
   
   Tax-exempt financing is typically arranged by means of a formal bid process.

8. What factors should be considered in deciding when to use a tax-exempt lease?
   
   For any asset acquisition decision, the principal financial objective is to obtain the use of the asset for the lowest possible total cost, as measured over the period the asset is to be used. Other factors affecting the selection of a financing option which should be considered by a governmental entity include:

    

   	Availability of cash at the time of procurement;
   	Competing demands on capital resources;
   	Essentiality of the asset to the basic functions of the entity;
   	Useful life of the asset;
   	Desirability of matching costs and benefits over time
   	Ability to improve bargaining positions with vendors; and
   	Political attitudes toward debt financing.

   For a variety of needs and circumstances, tax-exempt lease financing provides a governmental entity with an alternative to purchasing an asset with cash, acquiring its use for a period of time through a true lease or issuing bonds