Frequently Asked Questions

Non-appropriation is what differentiates a lease from a loan. Most agencies are allowed to enter into a lease without voter approval. A loan or bond may require voter approval.

A Tax-Exempt Municipal Lease is similar to a loan with the exception of the non-appropriation clause. The agency takes ownership of the equipment (or project) from day one, and NCL Government Capital is a secured party. There are no end of lease options to buy, renew or return equipment. The agency owns the equipment free and clear upon NCL’s receipt of the last payment.

A Tax-Exempt Municipal Lease Purchase is often the lowest cost option available to agencies who qualify. NCL, as the lender, is exempt from paying income tax on the earnings from the least, which translates into lower interest for the agency making the purchase. The lease includes a non-appropriation clause. The lease does not include end of lease buyouts, returns costs or renewals. This form of financing is often used when the agency’s intent it to own the equipment long term.

In the event an agency non-appropriates, they are required to return the equipment to NCL Government Capital. NCL, in turn, remarkets the equipment. The manufacturer/dealer has no responsibility.