What are the benefits?

There are many benefits to tax-exempt leasing:

Financial Benefits

	No down payment is required.
	Lower rates available - Interest income is exempt from federal taxes, therefore, lower financing rates may be available, resulting in lower payments.
	Hedge against inflation – buy now at today's low interest rates before prices rise.
	Builds equity.

Operating Benefits

	It is not considered debt.
	For municipalities, it is part of the operating budget - Only the current years' payment is in the operating budget.
	Enables you to replace obsolete or maintenance intensive equipment.
	Can be implemented quickly since voter approval is not required.
	Risk is low – For municipalities, the funds for payments are subject to annual budgetary appropriations. If funds are not appropriated, the municipality has the right to terminate the lease without penalty.
	Lessee takes title – Typically, the Lessee takes title to the equipment at the beginning of the lease. The Lessor takes a security interest in the equipment as collateral.

Flexibility

	Can be used for large and small projects.
	Can be used for new, used and refurbished equipment.
	Flexible terms available (1-15 years, annual, semi-annual, quarterly, or monthly payments).