The Leasing GroupThe Leasing Group

by The Leasing Group

The Leasing Group works with hundreds of clients across all industries, including municipal governments. Earlier this year, we were contacted by a small city in Kentucky, needing help to obtain a new truck for its volunteer fire department.

The volunteer fire department covers the largest fire district in its county. The department has 23 active members and provides 24-hour coverage for fire, medical, search and rescue, and other emergencies. The department’s fleet includes four fire pumpers, one equipment truck, one utility/hose truck and one brush truck.

The city did not have adequate funds to purchase a new fire truck outright at a cost of $295,000. City officials considered turning to a bond issue to raise the money. However, bonds have a high cost of issue and require a bond counsel to prepare the extensive paperwork required. Also, the process can take several months to complete. In researching other options, city officials settled on leasing instead.
 
Under a special IRS provision, funds can be loaned to local governmental entities through a lease on a tax-free basis. Provisions are similar to a bond, but don’t have many of the disadvantages. With a municipal lease, fees are low, no bond counsel is required and the transaction can be completed quickly.

The Leasing Group was able to negotiate a favorable leasing contract with a local financial institution that resulted in a savings to the city of about $20,000. The city also was able to acquire the new fire truck in a fraction of the time it would have taken to obtain it through the bond process. 

City officials are happy with the terms of their lease contract. They are even more excited to be able to ensure the safety of their citizens by adding the new truck to the fire department’s fleet so quickly.

Call us at (502) 547-2773 today for help solving any of your equipment financing problems.

The Leasing Group
About The Leasing Group