Frequently Asked Questions

About Sourcewell cooperative purchasing, government equipment leases, and more

Why is a non-appropriation clause necessary?

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.

What is a non-appropriation clause?

Every agency is required to budget expenditures for the next fiscal year. In the event the agency does not include the lease payments in the budget, the agency can elect to return the equipment and cancel the lease without penalty.

What is the responsibility of the manufacturer/dealer if an agency non-appropriates on equipment?

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.

What is an escrow agreement or vendor payable account?

An escrow agreement or vendor payable account is an account set up by NCL where the financed amount will be funded and held in the agency’s name for future funding to the manufacturer/dealer.