Frequently Asked Questions
 
Why Should We Use 21st Century Capital Services?
  1. 21st Century Capital Services can provide tax-exempt lease financing quickly, at very competitive rates, with less approvals required than conventional financing, and with costs dramatically less than conventional financing.
  2. Payment schedules are flexible and there are no initial costs.
  3. Financing terms are tied to the useful life of the equipment or facility, and they typically run from two to twenty years.
  4. The leases build equity, and the municipality eventually owns the project at the end of the lease.
  5. The leases can be prepaid or refinanced.
  6. 21st Century Capital Services is a Pennsylvania firm with a staff who understands Pennsylvania municipalities. The staff has worked with local government officials.
What Are Tax-Exempt Leases?
21st Century Capital Services’ tax-exempt leases are financings similar to the familiar car leases. However, the tax-exempt status makes them an attractive investment for investors. The municipality receives a low interest rate, but the investor receives an equivalent higher rate than the market since they pay little or no tax on their earnings.

21st Century Capital Services places its tax-exempt leases with our financial source, Government Capital Corporation.

Since the leases are considered a yearly appropriation item for budgeting purposes, tax-exempt leases do not require all the paperwork of some borrowings. There is no need to go through the Local Government Unit Debt Act for a tax-exempt lease or the formal legal proceedings of a bond issue. The lease is simply a financing tool that allows a municipal entity to purchase essential equipment, facilities, and services utilizing installment payments over the useful life of the asset. The payments under a lease arrangement are subject to annual budgetary appropriation, are included as a line item in the operating budget, and are not generally considered debt. Any municipality or political subdivision can utilize tax-exempt leasing. Eligible municipal entities include:
  1. Counties
  2. Cities
  3. Boroughs
  4. Townships
  5. Authorities
  6. School Districts
  7. 501(c)(3) Not-for-Profit Organizations
What are the Advantages to Tax-Exempt Lease Purchase Financing?
  1. ► Flexible Terms. Tax-exempt lease terms are generally matched to the useful life of the equipment or service to be financed. The flexibility of monthly, quarterly, semi-annual, or annual payments aids in easy budgeting.
  2. ► Builds Equity. A tax-exempt lease permits the municipality to build equity with each payment. At the end of the lease term, the municipality owns the equipment upon remittance of one dollar ($1).
  3. ► Avoids Inflation Delay Costs. A tax-exempt lease permits acquisition of the needed equipment or service before prices rise.
  4. ► Debt Limitation. Tax exempt lease financing does not affect debt limitation. Debt-to-fund balance ratios are very important in maintaining a good credit rating as well as staying within statutory requirements.
  5. ► Quick Response. Funds for equipment purchases can be made available in a matter of days after the municipality has completed the initial lease application form.
  6. ► Emergency Purchase. Most state laws allow a governing body to purchase equipment or services without going through the bid process whenever an emergency is declared. A tax-exempt lease is very useful for an emergency purchase.
  7. ► Pre-Payment Options. Unlike general obligation bonds, our Municipal Lease-Purchase Agreement provides an option to purchase value at every payment date. This allows the issuer the most advantageous options for pre-payment of the transaction.
What Types Of Projects Can Be Financed?
  1. Public Safety (Fire, Police, EMS, 911)
  2. Technology
  3. Energy Management
  4. Communication Systems
  5. Transportation Vehicles
  6. Medical Equipment
  7. Road Maintenance equipment
  8. Refuse/Recycle Equipment
  9. Recreation Equipment
  10. Modular Buildings
  11. Computers and Software
  12. Reassessment Projects
  13. Sewer and Water Equipment
If it is an essential public purpose item of equipment, facility, technology, or service, it can probably be financed.

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