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.
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