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New Resource Explains Tax-Exempt Equipment Financing for Schools

Public elementary and secondary schools in the United States spend more than $15 billion annually on equipment, vehicles and technology, according to the latest estimates from the National Center for Education Statistics. This figure does not include hardware and software expenses that fall below each state’s capitalization threshold, which are included in expenditures for supplies.

Many public schools qualify for tax-exempt financing but have questions. What kinds of equipment,  vehicles, technology and property are eligible? How does the financing work? What advantages do these options bring to educators and communities?

In response, Baystone Government Finance – the government and non-profit lending division of KS StateBank – has developed a new web resource, Equipment Financing for Schools. It offers answers, insights and “Request a Quote” capabilities for schools nationwide and the equipment vendors and brokers who serve them. Also provided is a downloadable flyer with school financing contacts who can answer specific questions and facilitate funding.

“This resource is based on knowledge gained from our 37 years of experience in school and government financing,” says Evan Howe, director of Baystone Government Finance. “In it, you’ll learn that several forms of equipment financing such as traditional leases and loans are available to public and private schools. The most attractive option for educational institutions that qualify is tax-exempt financing through municipal leases.”

These lease-purchase agreements are used for financing essential equipment and real property for K-12 public schools, public and state colleges and universities, and schools on Tribal Government (Sovereign) lands. Baystone’s new web resource clarifies what types of schools are eligible and how tax-exempt financing is helping educational facilities acquire and replace a variety of assets.

Equipment financed through tax-exempt municipal leases includes information technology (for example, computers, servers and educational software); transportation (diesel and electric buses and charging infrastructure); security systems (surveillance and safety devices); and infrastructure (modular buildings and facility enhancements).

A range of other equipment and real property is financed this way, from school heating, ventilation and air conditioning (HVAC) systems, solar and other energy systems, and LED lighting to artificial turf, roofs, boilers, copiers, telecommunications equipment, intercom systems and touch-panel monitors.

Baystone’s resource section and accompanying flyer discuss several advantages to using tax-exempt municipal leases. This option:

  • Conserves cash for other purposes, as up-front outlays are not required
  • Offers significantly lower interest rates than for traditional financing
  • Provides schools an affordable way to acquire the equipment they need within budget by making payments over time
  • Involves lower costs and less documentation than bond financing
  • Does not require voter approval or tax increases in most jurisdictions
  • Locks in current equipment prices before they rise again, and
  • Allows schools to maintain ownership of the equipment and build equity as payments are made

Our school financing section dives into the nuances of financing as well. A variety of financing terms and payment structures are available, such as those giving educational institutions the ability to delay payments until after the start of a new school year. Other options include escrow accounts, which are especially helpful when anticipating delays in equipment delivery.

We also discuss our experience in the field. Baystone provides the funding and documentation needed for schools in every state. Our contracts incorporate resolutions that can be signed instead of requiring a board or district meeting, and we offer other financing services for schools, state and local governments and non-profit entities. We work directly with schools and also partner directly with equipment vendors and brokers, providing them with school financing capabilities through customized white-label programs.

For more information on Equipment Financing for Schools, please visit:

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