Over the past few weeks, I've discussed the different types of fire truck financing.The final type of financing is called a fire truck bond or loan.
What is a fire truck bond or loan?The other types of financing were a form of lease financing - either walk-away, turn-in, or lease purchase. These types of agreements allow some flexibility with regard to payments.
A fire truck bond or loan is just what it sounds - a loan. It means you make a set amount of payments and then, after paying them all, you own the apparatus. There are no means for you to cancel the financing. Your only option is to pay the payments or be in default.
Some legal considerations about fire truck loans or bondsA bond or loan has more legal requirements than a lease type financing. The obligation is subtracted from your local government's borrowing limits. Many times, the payment obligation is mandatory which means the government must raise taxes to make payments. Finally, these legal requirements usually mean more fees than the lease type financing.
SummaryEach of these different types of agreements are perfect for the right situation. The trick is to know which form of financing fits your situation.
John R. Hill