Fiscal challenges addressed by lease-financing include:

Debt Capacity — Reduced support from traditional sources and resistance to increased taxes are pushing debt levels towards statutory limits and reducing financial flexibility in some City Governments that rely heavily on bond issuances to fund capital projects and surplus operating needs. Lease-financing, which is not considered debt under most local charters and state statutes, provides a flexible source of low-cost capital that enables a City Government to supplement limited resources to complete crucial projects and make needed equipment upgrades without incurring debt.

Cash Flow Management – Primary revenue sources, such as sales and property taxes, are collected only at certain times each year. Lease-financing enables a City Government to purchase new equipment, and maintain current technology, while helping to balance cash flow throughout an entire fiscal year.

Constrained Resources – Capital projects usually exceed available funds in most City Governments, causing vital operational and facility upgrades to be postponed until a later date which makes them subject to price increases and higher overall costs. Lease-financing enables a City Government to expand the use of existing resources across the organization and helps to reduce the risk of acquiring equipment at escalated costs in the future when cash might become available.

Benefits of lease-financing include:

• Strategy that reduces cost in one budget year and spreads project costs over multiple periods
• Contributes to the preservation of established budget allocations
• Protects against equipment becoming technologically obsolete
• Eliminates Surplus Property Disposal Problems

Providence Capital’s lease-finance payment plans can be provided directly to City departments and agencies, and also via payment plans that we might offer through suppliers selected by the City.