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GENERAL PARAMETERS OF THE EQUIPMENT,
FACILITIES AND INFRASTRUCTURE FINANCING
PROGRAM
The following are the important elements of the MFC equipment and facilities financing
program, whether the financing takes the form of a loan, lease/purchase or
installment/purchase agreement:
General Criteria
- Financing is a tax-exempt obligation under Section 103 of the Internal Revenue Code.
- Financing may apply to any form of equipment, facilities or real property improvements
that are essential to the operations of the public agency.
- Useful life of the financed property exceeds the financing term.
- Creates general or special fund obligation of the public agency.
Cost and Flexibility
- Credit approvals within 7 days.
- Funding within 30 days.
- One point of contact to facilitate financing.
- Interest rates may be held firm for up to 90 days, if required.
- No costs of issuance other than the legal/document review by the public agency's general
counsel.
- No ongoing administration fees apply.
- Financing terms range from 3 to 25 years.
- Financing amounts range from $50,000 to $10,000,000
- Flexible prepayment provisions are provided.
- Financings may be either escrow funded or structured as a capital credit line.
Requirements of Public Agency
- Credit qualify by submitting annual audit reports for last three years and current
budget.
- Obtain authorization of governing body of public agency to enter into financing
agreement.
- Obtain legal opinion on financing documents from public agency general counsel.
- Enter into acquisition/construction contracts with vendors/contractors and authorize
payments.
Legal Requirements
- Public agency qualifies as a political subdivision within the meaning of Section 103 of
the Internal Revenue Code of 1986, as amended.
- All constitutional and statutory steps have been taken to enter into the financing
agreement.
- Public agency assumes risks/rewards associated with ownership of the financed property.
TYPES OF EQUIPMENT, FACILITIES AND INFRASTRUCTURE
FINANCED
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