Municipal Finance Group 

   Welcome to Municipal Finance group.  MFG* is an innovative leader in Public and Municipal Leasing, our main focus is providing Tax-Exempt Lease Purchase financing for cities, states, counties, authorities, water, electric, special districts, schools, universities, and fire districts.

Within the government financial community we have funded several transactions for customers of Banks, Brokers, Financial Advisors and Vendors. Providing  financing requires a specific understanding of municipal government and practices

1. What is Lease-Purchase Financing?

Lease-purchase financing is one means by which a municipality or a public agency can acquire real or personal property. It involves the purchase of an asset through periodic lease payments, which have principal and interest components. Lease-purchase financing is an alternative to purchasing an asset with cash, acquiring its use for a period of time through a true lease or issuing bonds.

2. How does Lease-Purchase Financing Differ from True Leasing?

To a governmental lessee, the difference between lease-purchase financing and true leasing is who owns or will own the asset. In a lease-purchase, the lessee acquires an ownership interest in the asset, obtaining title to the asset at the end of the lease term. In a true lease, the lessee acquires only the right to use the asset for a period of time, but no ownership of the asset. The term of a true lease is usually much shorter than the useful life of the asset, while a term of a lease-purchase generally approximates its useful life. The term length differs because of what happens at the end of the term. With a true lease, the municipality typically relinquishes the asset but may purchase it at a price that reflects its residual or market value. With a lease-purchase, the municipality retains the asset.

3. How does Lease-Purchase Financing Differ from Bond Financing?

A bond financing is an exercise of a governmental entity's authority to incur debt. Unlike a bond issuance, in most states a lease-purchase financing is not considered to be debt for state law purposes and voter approvals are not necessary to authorize the transaction. The underlying security for the two types of obligations is also different. With bond financing, the borrower pledges a designated revenue source, such as property taxes or user charges, and obligates itself to raise revenues to the extent necessary to pay debt service. Usually there is no such obligation supporting a lease-purchase agreement. The governmental entity agrees only to budget and appropriate payments from available revenues each year.

Simple Approval Process

When compared with the process involved with in a bond referendum, lease financing is far more simple and flexible, time and transactions costs are a reduced.

Many of the costs typically associated with bond financings are reduced or eliminate. These include underwriters' counsel, trustee services, rating agency fees, insurance or bond referendum costs.

So give us a call or email and we will be happy to provide you with a lease payment quote good for 30 days and renewable upon request. There is no obligation and we will not pester you with email or advertising. We just think it makes sense for you to see if the rates and terms you are getting from your bank or lender are the best you can get in the market place. Give us a try and see for yourself.