Why Direct Lending Is The Optimal Financing Solution for Education
Avoid Raising Taxes with Direct Lending
Financing capital projects, such as equipment, infrastructure, facility, energy needs and unfunded pension obligations, can be complex and time consuming. Allow me to contrast the differences between direct lending and traditional bond financing.
Direct Lending
vs
MUNICIPAL BONDS
Project funding and cash flow
Direct Lending provides fixed and floating rate debt instruments to fund your projects. Additionally, your municipality can neutralize short-term cash flow gaps with a revolving line of credit. The municipality maintains title to the asset. Financing terms range from 1 – 30 years. The assets financed or a revenue stream serve as the collateral or security for the loan.
Bond Financing funds projects through fixed rate and floating rate structures. Short-term cash flow declines are funded with revenue anticipation notes. Financing terms range from 1-50 years. The assets financed, a revenue stream, or a voter approved tax pledge serve as the security for the bond.