Financial Solutions for Shrinking Budgets
Amidst the growing reality of budget cuts and ailing music programs, BGE Financial Corporation provides schools, directors, and band boosters with a glimmer of hope by helping them lease the new instruments that their students so desperately need, with financing options that stay within their often-restricted annual budgets. After working as a manufacturing representative for music companies and retail stores for nearly 20 years, CEO Bill Gray recognized that what band directors needed most was the opportunity to finance several different brands of instruments under the same lease. He founded this one-of-a-kind company (then known as Bill Gray Enterprises) in 1988 and ran it on a part-time basis for eight years; BGE Financial Corporation emerged as a full-time business venture in 1996. Because the company deals solely with the music business, BGE knows a great deal about the products that they are financing, and are sensitive to special financial needs that schools often have.
“It used to be that the only leasing programs available were directly through the companies that manufactured these instruments,” explains Gray. “So if a director needed to purchase instruments from two different manufacturers, they had to take out two different leases.” Because band directors generally have a hard enough time getting any large purchase approved, taking out multiple leases is simply an unrealistic option. “Many band directors are reluctant to propose the idea of leasing instruments to the school board, but this is in fact a very common way for schools to operate on a budget,” continues Gray. “Once directors understand that their school is likely leasing everything from buses to copy machines, they realize that [leasing] is a great way to get the instruments and equipment they need while staying within their budget.”
With a $3,000 minimum, any public, private, or parochial school is eligible to apply for a lease/purchase program through BGE Financial, and any school, university or music booster program is pre-approved. The lessee may include any combination of instruments and equipment from any dealer or manufacturer on the lease. Lease repayment terms of two to five years are available, and schools have the option of purchasing the leased items for $1.00 each once the lease is paid in full. During the length of the term, leases are renewed annually and automatically once all payments for the previous year have been made. Municipal school leases have a non-appropriation clause, which means that, if a school can no longer afford to fund a music program, they won’t be obligated to future payments. This is the only way a lease may not be renewed.
All leased instruments are covered by the same warranty that dealers offer to buyers, and the dealer is responsible for honoring that warranty as if the school already owned the instrument. BGE is not responsible for shipping costs or maintenance repair. However, the BGE Alliance Group was formed in 2000, which offers insurance policies to schools, music boosters, etc. While the BGE Alliance Group hopes to expand their insurance products in the future, they currently offer policies with 100% coverage and no deductible for any instrument on a lease/purchase plan, and existing customers also have the option of purchasing this policy for instruments that they are renting from a school music dealer.
BGE Financial Corporation offers a wide variety of financial services that can be customized to meet your school’s every need. For more information, please call BGE at (888)281-9606, or go to http://www.bgefinancial.com to find information or complete a proposal online.