How Municipal Leasing Works
Overview
A municipal leasing is similar to standard commercial leasing with a few differences:
- In a municipal lease, the intent of the lessee is to purchase and take title to the equipment. The financing is a full payout contract with no significant residual or balloon payments at the end of the lease term.
- The lease payments include the return of principal and interest, with the interest being exempt from Federal income taxation to the recipient. Typically, a tax-exempt interest transaction will be financed at interest rates lower than equivalent commercial financing.
- The municipal lease provides for termination for non-appropriation of funds by the Government Agency.
Termination for non-appropriation distinguishes a Municipal Lease from all other types of leases. The clause normally is required so that the lease does not constitute a long-term debt instrument (which would require a lengthy process for issuance). The obligation to pay is subject to appropriations being made annually over the term set forth in the lease.
What Equipment We Lease
- Real Property
- Fire, Police & Street/Service Dept. Equipment & Vehicles
- Software & Technology
- Medical & Office
- Energy
Who We Serve
- States, Counties and State & County Agencies
- Cities, towns, villages or other municipal entities
- Subdivisions of State
- Public Education
- Volunteer Fire Departments

Benefits of Municipal Leasing
- Simpler and faster alternative to bond issue
- No voter approval required
- Normalize capital budget
- Avoid deferred maintenance
- Flexible and customizable payment structures