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Tax-Exempt Equipment Leasing Program (EasyLease)

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.

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Application Form

Prior to completing an Application for Financing, we encourage first-time borrowers to review the Bond Basics. In addition, we also encourage all prospective clients to Contact CHEFA prior to submission of an Application, to ensure that your project qualifies.

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Restrictions on Use of Funds

IRS regulations state that not more than 5% of net bond proceeds may be used for private business use, or unrelated trade or business activity unrelated to the non-profit purpose of the borrowing institution. An example of what may be considered private business use might be physician offices located within a hospital, or a bank branch within a building in a university student center building.

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The Bond Issuance Process

The length of time needed to complete a bond financing depends on the nature and timing, and the complexity of the transaction structure. The exact amount of time may vary, but is characteristically four to six months for first-time issuers for the transaction to close. A sample financing timeline is shown below.

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Eligibility

Eligible Institutions

Institutions eligible for CHEFA financing must be a Connecticut domiciled 501(c)(3) organization and provide direct services to the public. Types of these nonprofits include:

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Tax-Exempt Bond Financing

CHEFA offers a choice of tax-exempt financing programs for eligible nonprofit organizations. Bond offerings can be publicly sold or issued as a private placement, unenhanced or with credit enhancement, bear interest at fixed or variable interest rates, and have a maturity of not greater than fifty years.

PUBLIC OFFERINGS

Fixed Rate Stand Alone Issue

The Authority's general guidelines for unenhanced offerings are as follows.  Each proposed bond issue will be evaluated on a case-by-case basis.

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Financial Advisory Services

CHEFA offers a variety of financial advisory services to assist both first-time borrowers as well as existing clients in meeting their capital financing needs. In addition, CHEFA has various outside financial advisors to provide additional support. CHEFA’s involvement does not end there. After a bond issue closes, CHEFA has staff dedicated to the ongoing monitoring of the issue until the bonds are eventually paid off.

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Tax-Exempt Bond Financing

Costs of Issuance

There are costs associated with the issuance of a tax-exempt bond issue such as underwriter's fees, bond counsel, trustees and other charges which may be included in the financing.  Tax law limits the amount of these costs of issuance that can be financed with bond or loan proceeds to 2% of net proceeds.  If such costs are above this 2% limitation, an equity contribution must be paid by the borrower or from other sources.

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Applying for Financing

The Authority does not have a formal application, but requires all prospective borrowers to submit a written request stating the institution's intent to issue tax-exempt debt through the Authority.  The request should include a description of the project to be financed, and the estimated amount to be financed.  Upon receipt of the request for financing from the institution, CHEFA will send an application letter to be executed by the borrower.

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Bond Issues

The Connecticut Health and Educational Facilities Authority strives to help Connecticut's eligible nonprofits gain access to low-cost tax-exempt debt financing so they can continue to meet the needs of their clients.

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