It's no secret that the state of the nation's water infrastructure is cause for concern. In fact, a 2014 survey by the American Water Works Association showed that water and wastewater infrastructure is the top concern among survey participants, with financing capital improvement ranking third on the same list.
Brian DePonte, head of innovation markets at Key Equipment Finance, recently led a webinar hosted by Forester University to shed some light on financing water infrastructure improvements. During the webinar, 67% of participants told us that available budget is the single biggest hurdle their organization faces when it comes to funding capital improvements.
While most municipal water districts in the past have turned to bond financing as a way to cover the cost of upgrading equipment, a more cost effective but lesser-known option of traditional bank financing, commonly known as “installment purchase financing or “lease purchase financing", is proving to be an easier way forward for some.
In his webinar, Brian explains that installment purchase financing is a specialized financing instrument that works as a hybrid between a traditional bond and bank financng. This lesser-known option includes many of the relevant and necessary features of a bond but offers a simpler and more cost-effective funding alternative.