Financing for Schools (K-12)
Out of all of the government entities, including federal
agencies, city and county
governments, state agencies, etc., the government
group under the most financial pressure is the K-12 public school system. Voters
are resistant to tax hikes, and there is a need to modernize and often expand
the school facilities, replace old computers with new, add Internet services to
the classrooms, and much more.
Lease/purchase financing is a great financial management tool for the school administrator. Its advantages include:
No cash down-payments are required
Soft costs (delivery, installation, set-up, testing, training
and education, etc.) as well as equipment can be financed
For unplanned acquisitions, items can be acquired today, and
the first payment won't be due until the next fiscal year’s budget if so
desired. This is particularly useful for emergency acquisitions.
Installment Purchases are not debt obligations, and therefore,
do not require voter approval. Leases are annual budgeted expenses, and if money
is not appropriated for the continuance of the lease, they can be cancelled
without penalty.
The lease term can match the useful life of the products
financed. I.e., computers are more short term, school busses longer,
portable classrooms, even longer. Lease payments can be tailored to the unique
needs of the school district--monthly, quarterly, semi-annual, annual, or any
combination of the above.
These items are of crucial financial management importance, especially to those schools that have experienced spending 20 year bond money (on which they will be paying interest on the debt for 20 years) for computers that lasted only 2 to 3 years. Any financial advisor would tell you that this is not an effective use of funds.
Put us in contact with your financial people to determine if
we can do anything for you.
