Fiscal challenges
addressed by lease-financing include:
Substantial
Capital Needs - Many
times, the levels of investment required to undertake numerous
initiatives and capital improvement projects exceeds the
availability of funds derived from external and internal
sources; which inhibits the timely construction of needed
improvements or causes economically worthwhile projects
to be delayed or scaled back. Lease-financing reduces
the impact of capital shortfalls, and provides a supplemental
source of low cost, tax-exempt capital for equipment acquisition
projects which may be ineligible for grant funding, or
which exceed the levels of allocated resources. The
targeted use of lease-financing capital frees up needed
resources which enables an airport to capitalize on meaningful
operational or revenue-generating improvement opportunities.
Financial
Constraints – Although an airport’s capital
needs are provided through a variety of traditional funding
sources: grant funds, cash reserves, passenger facility
charges, bond indebtedness, and commercial borrowings – each
source carries with it restrictions or onerous requirements
that either negatively impact liquidity or results in an
airport funding equipment projects with proceeds from debt
instruments with maturities that exceed the useful life
of the underlying assets. This often results in an airport
continuing to pay for an incremental share of an asset
after it has been replaced or otherwise taken out of service.
Lease-financing, which is subject to an airport’s
periodic budget appropriations process and is therefore
not considered debt under most state and local statutes,
provides an airport with the financial flexibility to fund
the costs of individual equipment acquisitions or equipment
components of more comprehensive projects with a source
of low cost financing capital that complements how an airport
intends to use and deploy assets - matching the financing
term with the life-cycle of an asset - all of which enables
an airport to better allocate financial resources and expand
its funding capacity across the enterprise.
A few of the time and money saving advantages of working with
Providence Capital include:
Low cost source of supplemental capital for equipment projects which helps to alleviate financial constraints and expand resources across the enterprise.
Tax-exempt payment plans (and interest rates) which help to maintain an overall, low cost of capital
Flexible, alternative financing mechanisms that do not employ the project eligibility criterion or assurances imposed by other funding sources for capital investments
Lower overall cost via a more concise alignment of financing terms with the actual life-cycle of equipment
Expanded financial capacity without impacting the capital budget or increasing debt burden
Plus, you'll have the added benefit of contracting with a Certified Disadvantaged Business
Please contact us to discuss the suitability of our lease-financing services for an equipment project or financing application within your operations.
