Municipal Leasing

Leasing Types:

Municipal Leasing

What Are the Types of Municipal Agreements?

  1. Rental of equipment with a Fair Market Value purchase option or return at lease end.

  2. Full payout lease with a $1.00 purchase option (interest portion is tax-exempt).

Who Qualifies for Municipal Leases?

Municipal Lease transactions are available to states and their political subdivisions.

This includes counties, cities, and agencies such as state universities, fire and police departments, school districts, sanitation, hospitals, and special districts. To qualify, a governmental entity must have at least one of the following powers:

  1. Eminent Domain
  2. Police Powers
  3. Power to Levy Taxes

Being supported by government funds or exempt from sales tax does not automatically qualify an entity. Non-profit corporations are not eligible for Municipal Leasing.

What Can Be Leased?

Virtually any type of personal property essential to a government’s operation can be leased.

Municipal Rental

Municipal Rental vs. Lease Purchase: What you need to know

In many cases, a Municipal Rental contract may be more suitable than a Municipal Lease Purchase. When choosing between these options, administrators must understand the key differences.

Local laws may restrict government entities from entering into lease contracts without bidding or voter approval. Some agencies have limited lifespans or face rapidly changing technology, making long-term ownership undesirable. In such cases, a Municipal Rental can be a better solution.

Unlike a month-to-month agreement, a Municipal Rental is a fixed-term contract where the leasing company purchases the property. At the end of the term, possession reverts to the lessor. Note that Municipal Rentals are not income tax-exempt but include the same non-appropriation provisions as Municipal Leases.

Municipal Rentals also offer flexibility: at the end of the initial term, the lease may be extended annually under the original terms. If not extended, the property must be returned to the lessor or their agent.

When appropriate, a Municipal Rental can effectively meet lessee needs. For quotes, advice on specific situations, or a comparison of leasing and rental options, call us at +1 (800) 822-8070.

Documentation

At Government Leasing, LLC, we handle all the documentation needed for your lease.

Sometimes, local laws require you to use specific forms or legal documents from your jurisdiction. When that happens, we do our best to work with those requirements. As specialists in municipal leasing, we make sure everything is in place to support your transaction from start to finish.

Documentation

Why Choose a Municipal Lease?

Quick Delivery

Lease financing lets government agencies get the equipment they need right away, without waiting for voter approval or going through a bond issue. That means less downtime and more productivity.

Non-Appropriation Clause

In many jurisdictions, administrators can’t legally commit to future spending. That’s why municipal leases include a non-appropriation clause—if funds aren’t available in future budget years, the lease can be ended without penalty. Equipment ownership usually stays with the agency, allowing it to take advantage of sales and property tax exemptions.

$1 Buyout

At the end of the lease term, the agency owns the equipment for just one dollar.

Early Purchase Option

If funds become available, agencies can buy out the lease at any point after the first fiscal year. We provide a clear amortization schedule with every agreement to make planning easy.

Flexible Terms

We tailor payments to fit your agency’s needs—annual, semi-annual, quarterly, or monthly. You can choose terms that match the equipment’s useful life to help lower interest costs. Options like deferrals, down payments, and advance payments are also available. You can even finance up to 100% of the equipment cost, including training and maintenance.

Nothing Down

Most of our lease plans don’t require a down payment or security deposit. If you prefer, you can lower your overall financing cost by making advance payments. Need to delay your first payment? We can defer it for up to a year with a small down payment.

Budget-Friendly

By spreading costs over several years, municipal leasing helps you work within your budget, upgrade equipment more easily, and scale as needed—all without waiting for new funding.

How Does It Work?

At Government Leasing, LLC, we’re flexible when it comes to rates, terms, payment structures, and documentation.

 If you’re preparing a product presentation or getting ready to submit a bid to a government agency, give us a call at +1 (800) 822-8070. We’ll provide a current rate quote and walk you through the available lease options. Once the agency gives the green light, we’ll get the documents ready and sent out the same day.

Leasing Vs. Bond

Why Consider Lease Purchase Financing?
  • No voter approval required. Skip the time and expense of a referendum.
  • Funded through your annual operating budget. No need for long-term debt planning.
  • Includes a non-appropriation clause. If future funds aren’t available, the lease can be canceled without penalty.
  • Competitive rates. When you factor in issuance costs and staff time, lease APRs often beat bond rates.
  • Ideal for smaller projects. Works best for terms under 10 years and financing under $10 million.
  • Fast and simple. Documentation is straightforward, saving staff time and minimizing soft costs.
  • No extra fees or reporting requirements.
  • Not considered debt. Because leases are renewed annually and tied to the operating budget, they don’t impact your future bond capacity.
  • Flexible exit options. Early buyouts are available if funds become available or needs change.
  • Finance exactly what you need. Avoid excess borrowing.
  • No penalties for termination. If funding isn’t appropriated, you’re not locked in.
  • Lease terms align with the useful life of the equipment. Smart planning, better budgeting.
Bond Issues: The Traditional Route (and Its Trade-Offs)
  • Requires voter approval. A failed referendum can delay critical purchases.
  • Costly and time-consuming. Election costs, advertising, and staff involvement add up quickly.
  • High issuance costs. These can significantly impact your true borrowing rate.
  • Better for large-scale, long-term projects. Bonds make sense when locking in low rates for major capital investments.
  • Slow process. Preparing and issuing bonds takes time—and ties up your team.
  • Ongoing expenses. After the bonds are issued, costs don’t stop:
    • Trustee fees
    • Compliance reporting
    • Additional audit and disclosure requirements
    • Rating agency reviews and associated fees
  • Restricts flexibility. Bond covenants can limit future borrowing.
  • Prepayment penalties. Call provisions may apply if you want to pay off early.
  • Less precision. Bond proceeds may exceed actual needs (earning less than you’re paying) or fall short (requiring additional general funds).
  • Fixed payments, no matter what. Even during economic downturns, you’re locked into repayment.
  • Longer terms than the equipment’s life. You could still be paying for outdated assets.

Obtain a Municipal Quote Now

For a detailed quote, please call Government Leasing, LLC on our toll-free line: +1 (800) 822-8070.

If a Request for Quote (RFQ) or Request for Proposal (RFP) has been issued, please include it—along with equipment and maintenance pricing—as it typically addresses most required details. Based on this information, we can provide a tailored quote.

Upon acceptance of the quote and receipt of a purchase order with acceptable terms, Government Leasing, LLC will prepare and send the necessary documentation for signature.