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Personal debt Financing Primer for Local Governments: Repayment Fund Agreements

Personal debt Financing Primer for Local Governments: Repayment Fund Agreements

step 1. The latest Town away from BlueSky orders a fire truck to own $350,100000. To cover this new truck, the city gets into a financing arrangement with a district financial. The credit offer offers for a period of 5 years, at the cuatro.2% attention. The town covers and you will requires label towards the truck, but features the bank a protection demand for new vehicle up to the mortgage was paid back entirely.

2. Hazy County enters a binding agreement to construct an alternate sheriff agencies annex. The total costs is actually $nine mil. To finance the building, the brand new county borrows money from a huge lender. The terms of the mortgage are listed below: 5 years, at step 3.9% notice. The lending company retains term to your building through to the mortgage is actually paid in complete. When this occurs, title to the sheriff department annex reverts towards state.

One another counties and you can municipalities (including some other local agencies) is actually licensed to borrow money because of the stepping into repayment loans plans

step three.