What Is Lease Purchase Financing?
As cities, counties, schools, fire districts, and other municipal entities work to serve their communities, they often need equipment, but are without the immediate financial resources to address those needs. At Baystone Financial Group, we specialize in lease purchase financing (LPF), allowing municipalities to efficiently purchase vital equipment such as fire trucks or new computers without large, up-front cash payments. Unlike captive lending programs, Baystone finances both new and used equipment, from any manufacturer.
LPF through Baystone can help our clients pay for big-ticket items such as vehicles and buildings, or it can be used to fund essential smaller purchases. We work with:
- vendors who want to offer their customers a fast, clear-cut financing process;
- municipalities and nonprofits who need to partner with a solid lender; and
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brokers who need financing options their customers can count on.
How Lease Purchase Financing Works
Lease purchase financing allows municipalities to purchase property and equipment through installment lease payments, which can be made monthly, quarterly, semi-annually, or annually. As payments are made, the municipality — which maintains ownership of the equipment — builds equity in its investment.
For municipalities, LPF is a year-to-year commitment to make lease payments, not a commitment to pay debt. Because LPF contains a non-appropriation or “funding-out clause,” in most states, no voter approval is necessary to enter into the agreement.
