EASY LEASE PROGRAM

The Authority provides a tax-exempt financing alternative to expensive taxable vendor or commercial financing for the purchase of capital equipment.

The program features an abridged application process, standardized loan documentation, and reduced financing fees compared to a traditional bond financing. Debt issued through the EasyLease Program is secured by the assets financed and the issue is privately placed with a leasing company through a competitive bid process.

Who Can Borrow

The EasyLease Program is available to eligible not-for-profit, tax-exempt organizations for which the Authority currently has authorization to issue bonds.

Amount and Term of Financing

Borrowers can finance purchases from $250,000 to $10 million for terms ranging from five to ten years. The maturity of the loan will be determined by the useful life of the equipment financed and/or by the investor (the Lessor).

Typically, the larger the amount to be financed, the more investor interest will be generated. Attracting as many investors as possible will potentially result in more favorable interest rates and financing terms.

What Can Be Financed

Eligible equipment includes, but is not limited to, the following:

• Medical, diagnostic and laboratory equipment
• Computer networks and equipment
• Telecommunications equipment
• Vehicles
• Furniture
• Energy-management systems

Financing Fees

The Authority charges a one-time fee of 0.10% of the amount to be financed, and its Bond Counsel fee is $12,500. The Financial Advisor fee is $7,500.

Lease Structure

The EasyLease Program converts a traditional two-party commercial lease into a tri-party tax-exempt lease and sub-lease structure. Under this structure, the commercial lender serves as Lessor, the Authority as Lessee, and the Institution as Sub-Lessee.

The Authority sublets the equipment to the institution, and all amounts due to the Authority under the sub-lease are assigned to the Lessor. Payments are made by the institution directly to the Lessor during the term of the lease. Upon maturity of the lease, the institution becomes the owner of the equipment for the sum of one dollar.

Financing Schedule

The timeline from submission of the application to the closing of the lease is as follows:

Selection of Lender (Lessor)

Once the application is received, the Authority's Financial Advisor will assemble and distribute a bid package to approximately 20 potential investors. The bid package consists of information about the institution, including financial and statistical data, the equipment to be financed, the term of lease and timeline for the financing.

We typically allow seven to ten business days for the investors to submit their proposals. Once all proposals are received, the Authority's Financial Advisor will compile an analysis detailing the results of the bid and review the results with the institution to select the investor that offers the most favorable interest rate and terms.

Once an investor is selected, the investor will conduct a final credit approval of the institution before issuing a final commitment. This usually takes between ten and fourteen business days.

Application and Approval Process

The institution will be required to complete an application which requires the following:

• A description of the institution and the equipment to be financed, the desired term of the lease, contact information of counsel that will represent the borrower, and a copy of the Certificate of Need approval for the project, if applicable.
• Selected financial and demand data for the past five fiscal years and current year-to-date.
• Audited financial statements for the previous five years with the most recent internal year-to-date statements.
• Reimbursement and Authorizing Resolutions—The governing body of the institution must adopt an Authorizing Resolution, which approves the project for financing. A Reimbursement Resolution must also be executed to ensure that any funds expended by the institution on any equipment purchases or renovations prior to the delivery of funds will be eligible for reimbursement. A sample form of the resolutions will be included with the application.
• Approval Process—For lease transactions under $5 million, Authority staff is authorized to proceed without approval from its Board of Directors. Any transaction over $5 million is subject to review by the Board, which typically meets every fourth Tuesday of the month. All transactions will be reviewed by the Authority's internal credit committee prior to submission of the bid package to investors or to the Authority's Board.