Credit requirements for fire truck lease purchase agreements

Just like a conventional loan, you will provide some financial information so that you can be sure you won’t be obligated to payments you can’t afford

They will review your current loans and assets, income and expenses, and your future major purchase plans

The bank will complete a credit analysis and determine if you are approved for financing

Contract and legal requirements for fire truck lease purchase agreements

After the credit analysis and approval, you will receive a financing contract for you to sign

Because a lease purchase agreement is tax-exempt, you will have some IRS required procedures and forms to follow and file.  Confirm your banker is able to help you comply with the IRS rules regarding lease purchase agreements and filing the appropriate forms, namely the IRS form 8038

It helps to have an IRS Registered Preparer help with the financing to ensure you complete all the IRS rules correctly and avoid IRS examinations, taxes, and penalties

In some states, there are specific laws to follow. Confirm your banker will help you meet these laws

Your fire department will designate an “authorized signer” who will sign the contract on behalf of your fire department. The secretary of your fire department will certify the authorized signer

Your fire department will have an attorney review the lease purchase agreement and certify that you are not in violation of any legal restrictions

Special rules for volunteer fire department lease purchase agreements

If your fire department is a private fire department (not a city, municipal, county, township, or district), or in other words, a 501c(3) not-for-profit organization, there are a couple of extra IRS required steps to follow

For more information about volunteer fire departments, click here.