Does your college or university campus need new vehicles to ensure reliable campus transportation?
When it comes to providing safe campus vehicle services for students, it’s no small expense. Campus transportation costs includes:
-Fuel
-Preventative Maintenance
-Driver Training
-Rentals
-Charters
-And traffic and safety vehicles.
Better Financing Options
Many Colleges and Universities in the past have procured vehicles utilizing their own capital budget funds or by utilizing bond proceeds. The problems with these two options are:
-Utilizing capital funds further constricts a capital budget with ever increasing competing demands.
-Bond proceeds, even at low interest rates, can have a higher “true cost” because it results in financing an asset which is useful for 5 to 7 years over a 20 year period.
You can benefit from leasing the vehicles of your choosing for your campus transportation requirements utilizing a customized capital or operating lease from Grant Capital Management.
Vehicle leasing is perfect for equipping your campus with the vehicles it needs to operate campus life smoothly – buses, patrol bikes, campus security cars, food trucks and more. Leasing also allows your institution to:
-Ease the demands on its capital budget by utilizing operating funds to pay the lease payments.
-Allows the institution to match the term of its financing with the useful life of the asset.
What is an operating lease?
An operating lease is a finance lease that provides clients the option to pay for the right to use vehicles but not own the vehicles as campus property. This is beneficial to campuses nationwide because the vehicles can be accounted for as operating expenses and not impact the capital side of your budget.
If your campus prefers to own vehicles after payment, you can always choose a capital lease agreement. This type of financing lease allows your campus to take on joint ownership with the lessor that owns the vehicles. This lease agreement can be beneficial to your campus because the depreciation of the campus vehicles and the interest you pay on the equipment can be used for tax cuts because it’s on the balance sheet.
What is a capital lease?
Capital leases typically provide the best financial option for colleges and universities when it comes to vehicles because campus vehicles do not become obsolete within a short period of time. As long as a vehicle is operable, safe, dependable, and free of heavy maintenance burdens it is possible that the vehicle can have a useful life of up to 10 years.
Here are the benefits a capital lease offers if you do desire ownership over the campus vehicles:
-You can gain ownership over the equipment at the end of the leasing term.
-You can select vehicles that you choose vs. a list of preset options.
-The lease term can be longer for certain vehicle types vs. an operating lease.
If you only need the vehicles for a short period of time, go for an operating lease. It’s simply a rental situation without the drawbacks that come with outright ownership.
Schedule an appointment with Grant Capital Management to get started on your customized campus financing solutions at competitive market rates today.
Grant Capital Management is a leading provider of capital lease financing to the public sector. We finance almost any type of essential-use capital equipment, real property or Energy Performance Contract. Since 2000, we have funded over $4 billion in lease financings. Grant Capital designs master leases, taxable and tax-exempt lease-purchase agreements and operating leases from $500,000 to $60 million and beyond with terms in excess of 20 years to meet our clients’ specific requirements.
If you need lease-financing services to finance a project, contact Grant Capital Management at 410. 715.9135 or click here today!
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Source:
http://www.carsdirect.com/auto-loans/commercial-vehicle-leasing-operating-vs-capital-lease-options
http://biztaxlaw.about.com/od/financingyourstartup/a/capoplease.htm
