Municipal Leases

Municipal Tax Exempt Leasing Program

Tax-exempt is a unique and economical financing method that allows government entities to obtain FULL OWNERSHIP of capital assets on an installment basis at favorable interest rates.

Here's How It Works
A lease/purchase plan for the desired equipment is structured by Regal Finance. At the end of the lease period the lessee will own the equipment by exercising an option to buy. The option price is typically $1.00. In addition, lease payments remain within your current budget year.

Here's Why It Works
Regal Finance is able to finance most municipal and state governmental entities with virtually any form of personal property under a lease/purchase plan, primarily because of the favorable tax consequences contained in Section 103 of the IRC (Internal Revenue Code) and amended in the 1986 Tax Reform Act. This has the positive effect of creating non-taxable income to the lessor. The savings is passed directly to the municipality, the lessee, in the form of lower interest rates.

Tax Exempt Leasing Also Provides These Benefits
Obligations incurred by a governmental entity under a lease/purchase plan may be treated as a lease for debt limitation purposes. Consequently, the municipality's obligation will appear as an encumbrance only in the amount due during one fiscal period. It will not be long term debt.

In most cases where debt limitation laws apply, the elase may be terminated by the governmental entity if funds are not appropriated for the ensuing fiscal period. With this "non-appropriation" clause the governmental entity does not obligate itself, for debt limitation purposes, for more than one fiscal period even though the contract may be for a longer term.

Under tax-exempt leasing, down payments on equipment and lump sum appropriations are not necessary.

What Municipals are Eligible?
State agencies, state and city governments, school districts, port authorities, hospitals funded by governmental entities, fire and water districts, volunteer fire companies or any entity which is a municipal corporation or which has been delegated the right to exercise part of the sovereign power of a state or local government.

What Type of Equipment May Be Leased?
The list is almost endless. Almost any type of capital equipment essential to the functions of a governmental entity may be acquired through this program.

Municipal Golf Centers and Course Equipment
Computers, Typewriters, and Word Processors
Fire & Safety
Athletic, Furniture, and Printing
Medical
Printing
Vehicles
Water and Sewer

If one of the most difficult tasks as a public official is obtaining more equipment and providing more services in a more economical manner, consider tax exempt leasing.