Municipal Leasing

What Is Municipal Leasing?

PlayPower Financial offers the most efficient and flexible financing options with municipal leasing.

Municipal leasing is a proven and legal means of financing, also known as a tax-exempt lease. Municipal leases are contracts where one party —  the lessor — owns equipment and transfers possession of that equipment to another party — the lessee — in exchange for payment over a specified period. These arrangements have many of the same functions as standard leases, but they differ in several areas:

  • Municipal leases finance through full-payout contracts involving minimal residual or balloon payments.
  • Interest is tax-exempt to the lessor, enabling them to offer a lower interest rate to the municipality.
  • If the lessee is unable to obtain the funding needed for future payments, they can terminate the agreement without penalty.

Authorized by section 103(a) of the Internal Revenue Code, a tax-exempt lease or lease-purchase agreement is an installment purchase, conditional sale or lease with an option to purchase for nominal value. It may also be referred to as a municipal lease. The interest earned by the investor is exempt from federal income tax. Start enjoying the benefits of a new playground today!


Municipal Leasing Features

When you invest in municipal lease financing for playgrounds, you can expect all of the following characteristics and conditions:

  • Funds 100% of your project or equipment cost
  • Does not constitute statutory debt
  • Approved by board/council — no bond election required
  • Flexible terms — choose from deferred annual, semi-annual, etc.
  • Provides early redemption privileges

Benefits of Municipal Playground Leasing

Municipal leasing for playgrounds offers a simple, affordable means of funding your community play space. This financing option comes with many advantages for your park, school, church or apartment complex, such as:

  • Preserving capital: Because you don’t have to pour all of your money into your playground at once, municipal leasing allows you to hold onto your capital dollars. You can put those funds toward other projects in the meantime.
  • Obtaining tax benefits: Municipal lease financing is tax-exempt, meaning you’ll pay minimal interest rates. You may even be able to claim your payments as a deductible during tax season.
  • Achieving fast results: Playground financing gives you the convenience of building and enjoying your playground immediately instead of spending time and effort fundraising or waiting on voter approval.
  • Covering soft costs: Your playground equipment lease will include project costs like site preparation, installation and maintenance.

Qualifications for Tax-Exempt Playground Leasing

To qualify for municipal playground leasing, you must be a State or possession of the United States or the District of Columbia. You can also qualify for tax-exempt leasing if you are considered a political subdivision, such as a city, town, county or state entity, such as a school district.

Though not-for-profit organizations do not traditionally qualify as tax-exempt obligations, some may be eligible if sponsored by a governmental unit.

Invest in Municipal Leasing for Playgrounds at Playworx

You can get the funds you need to build your dream playground with municipal leasing from Playworx. Let our experienced public finance staff walk you through the process and assist with specific questions. Please email us or give us a call today at 404-427-5270.


Get Your Dream Playground Today!

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