Inadequate tax bases and fee-revenue sources, and competing demands for existing taxes are some of the reasons why a Special District or Municipal Authority might be inclined to finance equipment acquisitions and capital projects instead of purchasing them outright.   Providence Capital’s lease-financing programs offer viable solutions to fiscal challenges and provide a number of related benefits.

Fiscal challenges addressed by lease-financing include:

Level Budgeting - Budget stability is highly advantageous for a Special District reliant upon fee-based services. By spreading payments out over time, lease financing links repayment obligations to revenue as it is received, and helps to maintain a stable and predictable budget across several fiscal periods.

Reduced Flexibility - Reductions in state and local support, resistance to increased fees and emergency needs that cannot always be met by budget supplements cause a Special District to find flexibility within its budgets. Lease-financing provides increased financial flexibility by dividing payments over the useful life of an asset so that critical projects can be undertaken without impacting the capital budget.

Supplemental Capital Source - Insufficient fund balances to pay for expensive items out of current revenues, and the expense of postponing vital equipment replacements and facility upgrades until future fiscal periods compel a Special District to seek alternate means to enhance financial capacity without sacrificing financial flexibility. Lease-financing, which is not considered debt under most local charters and state statutes, enables a Special District to cost-effectively supplement its existing resources to complete critical projects across the organization.

Benefits of lease-financing include:

• Allows an asset to be paid for as it is used without the commitment of a long term acquisition
• Does not impact existing debt capacity
• Enhances cash flow throughout the entire fiscal year
• Helps maintain reserves for contingency purposes
• Protects against equipment becoming technologically obsolescent

Providence Capital’s lease-finance payment plans can be provided directly to a Special District or Municipal Authority, and also via payment plans that we might offer through suppliers selected by your organization.