Municipal Leasing
Municipal Lease Purchase is the most accepted financing method used by State and Local Governments in the U.S. to acquire equipment.

Oakridge Leasing specializes in structuring federal income tax-exempt leases for cities, counties, and other political subdivisions, as defined by the IRS. We also provide taxable leases for not-for-profit organizations.

Here are some commonly asked questions regarding U.S. Municipal Lease Purchases:

Q: What is a municipal lease?
A: A municipal lease-purchase agreement is a financial instrument that enables a municipality to use annual tax revenue streams to make payments for essential use equipment or facilities at lower tax-exempt interest rates.

Q: Why use a lease purchase to acquire equipment?
A: Lease purchase financing represents a way for municipalities to conserve their cash while acquiring the equipment and facilities necessary for government to function. There are laws in all 50 states which restrict the ability of municipalities to borrow money. However, there are very few restrictions on the ability of municipalities to enter into a lease purchase agreement. A municipal lease purchase represents a year-to-year commitment on the part of a municipality to make lease payments, not a commitment to pay debt service. In other words, lease purchases are not considered debt and therefore, are not subject to the limitations placed on debt by state and local laws.

Q: What is a Tax-Exempt Lease?
A: Tax-exempt lease financing is one of the most successful methods used to purchase vehicles, aircraft, communications and other equipment. This type of installment purchase is also referred to as "government lease-purchase" and/or a "municipal lease". The interest earned under a properly structured and documented lease is exempt from federal income tax under the same tax laws that enable a municipal bond to carry a tax-exempt rate. Because the Lessor does not pay federal tax on the interest earned, a tax-exempt lease provides a much lower interest rate to the municipality than other types of borrowing instruments.

Q: What types of municipalities qualify for tax-exempt financing?
A: Cities, Counties, School Districts, Townships, Villages, Police Departments, Fire Departments, Special Purpose Districts and any other governmental entity.

Q: What is a non-appropriation clause?
A: Non-appropriation may be used only in cases where the Lessee is 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. 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.

Federal Government Leasing
A Federal Lease is an alternative to an outright purchase. It allows Federal Agencies to obtain necessary equipment and other assets while still operating within their budget.

The type of property that can be financed with a Federal Lease includes computers, software, office equipment, communications equipment, security systems, furniture, and vehicles. We also arrange financing for other types of property.

The term of a Federal Lease is typically one to three years with longer terms available, depending upon the type of equipment and the needs of the Federal Agency. During the term of the lease, the Government Agency makes scheduled payments. Oakridge Leasing provides flexible payment terms that meet the financial needs of the Federal Agency.

Who Uses a Federal Lease?
Most agencies of the executive (such as the Departments of Homeland Security, Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Interior, Justice, Labor, State, Department of Transportation, Treasury and Veterans Affairs), legislative (such as the Senate, House of Representatives, Library of Congress, General Accounting Office, Government Printing Office), judicial (such as the Supreme Court and other Federal Courts) branches of the Federal Government use leasing to acquire property and other assets, as well as several semi-independent agencies (such as EPA, FEMA, GSA, NASA, SEC, SBA, SSA, TVA, and USPS). In addition, some contractors and subcontractors to the Federal Government use Federal leasing to acquire property needed to fulfill their contracts.

Overcome Budgetary Constraints
The most significant challenge faced by Governmental Agencies when acquiring needed property is their fiscal year budgetary requirements. Often, insufficient funds are budgeted for the outright purchase of essential property. Oakridge Leasing overcomes this budgetary constraint by financing the property. We can finance property obtained with open market pricing, terms and conditions.

When the cost of equipment is viewed as a series of monthly payments, the budgetary process is more efficient in managing an acquisition. Leasing presents the opportunity to spread the acquisition over multiple budgetary periods, which is more likely to correspond with the useful life of the equipment. Our low rates permit the agency to increase their purchasing power. For example, without leasing, budgetary limitations may force an Agency to settle for equipment that is less than adequate for its long-term needs.

How to Obtain a Government Leasing Quote
For a detailed quote, please call Oakridge Leasing on our toll-free line: 1-800-485-5759. Provide us with the lessee name, property description and cost, the desired term, and a desired payment amount. We will respond with a customized quote. Upon acceptance of the quote and receipt of the purchase order, Oakridge Leasing will generate the necessary documentation and forward it for signature.