Business financing simplified

Sale and Leaseback

Business financing simplified

Sale and Leaseback
in a nutshell

Sale and leaseback or just “leaseback” is an arrangement in which the company that sells an asset can lease back that same asset from the purchaser. With a leaseback the particulars of the arrangement, such as the lease payments and lease duration, are made immediately after the disposal of the asset. Customers may be responsible for any maintenance or repairs due on their asset depending on their contract. Companies use sale and leasebacks when they look to raise cash against unencumbered assets to invest in any various other purposes but they still need the asset itself to operate their business. Sale and leaseback is a suitable facility suitable for asset-heavy, cash-poor businesses that need additional capital for business purposes. 

This transaction allows the leaser to use the asset but not own it. You can also sell the asset for a cash influx and then it can be leased back to you.

Some of our lenders

Cashflow

No high upfront cost of buying an asset, spread the cost of asset use over a longer period.

BENEFITS

Reduced Risk

You pass over the responsibility of asset disposal to the lessor this means they bear the risk of fluctuation values.

BENEFITS

Financially effective

A leaseback transaction can help improve a company's balance sheet health: The liability on the balance sheet will go down (by avoiding more debt), and current assets will show an increase (in the form of cash and the lease agreement).

BENEFITS

Simple

Simplified budgeting: Switching to leasing can help with budgeting and cashflow management with assets such as vehicle fleets, and the budgeting of future additions.

BENEFITS

Who is Eligible?

  • Asset-heavy businesses.

  • All credit profiles.

  • Businesses looking at different revenue avenues.

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How does it work?

1. Selection: Select the asset you would like to have use of and choose an amount you would like to borrow.

2. Transaction: Sell the asset to the lessor.

3. Payment: Make lease payments to the lessor over the term.

How Much Does It Cost?

FAQ's

The asset is owned by the lessor whilst the lessee still gets the benefit of being able to use the asset

Whilst your company financials are important, the most important documents will be details of the asset including all information such as serial number etc. and then you will be required to provide a proforma invoice for the asset from your supplier.

Furthermore, a valuation and surveyors report will have to be done, which can take anywhere from 2 weeks to 2 months, along with lawyers doing the relevant documentation and checks.

It depends from lender to lender, but because this financing is predominantly based on the quality of the asset and your own timeframes. It is quite common that a supplier can be paid in a matter of days from application.

Whilst your company financials are important, the most important documents will be details of the asset including all information such as serial number, usage, etc. and then you will be required to provide proof of purchase (eg bank payments) and also the original purchase invoice for the asset from your supplier.

Qualifing questions

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Please pop your details in the form below and we’ll get back to you within 24 hours.

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