Public Financing Options for Municipalities

Municipal governments use tax revenue to ensure essential services, such as sewer maintenance and garbage collection, are provided to the community without interruption. Not only do these administrative divisions of cities and towns prepare budgets that include funding for salaries of government employees, but they must also determine how to finance other community needs, such as the acquisition and maintenance of equipment, buildings, and vehicles.

Local governments may need financial assistance to cover these costs, plus expenses for one-time repairs, replacements, or special projects. Public financing offers a way to pay for a variety of community expenses.

What is Public Financing?

Public financing refers to loans made to state and local governments that fund capital improvement projects or support other essential services. These loans can be repaid using current and future tax dollars. Each public financing option allows you to select a repayment term that supports the community's planning and development goals. Terms can span several decades, so no one group of taxpayers is burdened with the cost.

Funding options include municipal term loans, lines of credit, and equipment lease financing.

What are Municipal Term Loans?

A municipal term loan is funding that's disbursed in one lump sum and repaid with interest over a set period of time. Common loan uses include the financing of utility upgrades to water treatment plants and sewer systems, new building acquisitions, or major renovations to existing buildings. Funds can also pay for other smaller project needs specific to your jurisdiction.

What's a Municipal Line of Credit?

Some projects require funding at different phases or may span several years. A municipal line of credit grants the borrower a pre-set loan amount from which they can withdraw funds as needed. Interest only accrues on the amount borrowed. This could save money if project funding is needed in stages or to stabilize unexpected, short-term cash flow challenges.

What is Municipal Equipment Leasing?

Public financing is also available to pay for equipment leases and the purchase of fleet vehicles, school buses, and fire trucks. With no down payment required, this funding option allows you to acquire the equipment you need to remain operational. Leases can be structured in a way to meet your capital improvement goals while remaining within budgetary limits.

Why Choose Public Financing?

The ability to preserve cash for harder to finance projects makes public financing an attractive, low-cost option for local municipalities. In addition, borrowers can select from a variety of flexible principal and interest payment plans while ensuring residents are unaffected by delays in grant or bond proceeds.

Let's Invest in the Community Together

Town and Country Bank and Peoples Prosperity Bank offers public finance packages to meet your needs. Lean on our trusted relationships with local engineers, attorneys, bond counsel, and municipal vendors to ensure your project is seamless from beginning to end.

Let one of our experts help determine the best municipal financing option for your budget and project needs. Request a free, no-obligation consultation with our business lending team or visit your local branch in Central Illinois and the Metro East today!