How to Qualify
Compared to other funding methods, lease-purchasing through SCB Public Finance is a quick and easy process. To qualify the government entity represented must have eminent domain, the power to police, the ability to levy taxes or use the asset for public purpose.
The issuer of a lease-purchase must be government entity which include: state, county, and city governments, universities, school districts, ambulance, fire, departments, police departments, conservation districts, and water boards. .
Our lease-purchases are structured as a series of one-year renewable obligations that are subject to the government entities ability to appropriate funds for the continuation of lease payments. Structuring a major capital project financing as a tax-exempt lease purchase merely provides the legal authority for the borrowing to occur outside of constitutional and statutory debt restrictions.
The lease is not counted as debt on the balance sheet, but it is considered an operating expense. Financing is available up to 100 percent and the titles are given to borrower at the time of purchase. All leases are structured as net lease which means the lessee is obligated to provide maintenance, insurance, parts, and accessories for the asset.
After the potential customer and SCB Public Finance discuss the customer’s financing need, financing options, the desired equipment/property, and timing, a proposal is provided by SCB Public Finance. If the proposal is satisfactory to the customer, it is signed and returned to SCB Public Finance along with specified financial statements and/or audits and current year budgets. SCB Public Finance then performs its due diligence and makes a credit decision approving the transaction or a modified version of it.
Following approval by SCB Public Finance, a document package is prepared by SCB Public Finance for execution by the customer, typically with the assistance of the customer’s legal counsel. The transaction can be closed, and SCB Public Finance makes payment to the vendor, once all documentation is complete and the equipment/property is delivered to and accepted by the customer.