Small-Dollar Municipal Purchases? Leasing Just Makes More Sense

When a town needs a new fleet vehicle, public safety equipment, or updated public works machinery under $2 million, leasing often makes more sense than turning to bond financing. In many cases, leasing is the smarter, more efficient solution.

Bonds absolutely have their place, especially for large, long-term infrastructure projects. But for routine equipment purchases, they can introduce extra cost, complexity, and time delays. Those issues don’t serve the municipality, or the bank, particularly well.

Leasing starts with a clear financial advantage: lower upfront cost. Instead of tapping reserves or waiting to accumulate capital, municipalities can acquire essential equipment right away. They also can spread payments evenly over time. That flexibility helps towns preserve cash, manage budgets more predictably, and keep other priorities on track.

There’s also an important political and public-facing benefit. Leasing is often viewed as a more fiscally conservative approach—closer to “pay as you go” than “taking on debt.” Additionally, it can help municipalities sidestep tax increases, avoid lengthy bond approval processes, and reduce the risk of public pushback that sometimes comes with bond referendums.

From an operational standpoint, leasing checks a lot of boxes: it’s faster to execute, simpler to explain, and easier to align with annual budgets. Moreover, for purchases under $2 million, it delivers financial discipline without sacrificing transparency or accountability.

Finally, these transactions are best handled close to home. Community banks are well-positioned to be the go-to partners for municipal equipment leasing, thanks to local decision-making, personalized service, and a real understanding of a town’s financial goals. And when additional expertise or capacity is needed, Bankers’ Bank’s Leasing group can provide the support to help your bank confidently deliver these solutions. In short, leasing often provides the better answer for smaller municipal equipment needs.