Sale Leaseback Financing

Home  >  Services  >  Financial Capital  >  Sale Leaseback Financing

accounts receivable loans,receivable financing, construction factoring, factoring construction invoices, abl loans for construction companies, loans against commercial real estate, heavy equipment loans, hard asset equipment loans, inventory financing, sale leaseback loans, equipment sale leaseback financing, heavy equipment collateral loans, turnaround capital, distressed abl lending, asset based loans for distressed companies, turnaround asset based lending, asset based line of credit, abl loans, working capital finance, secured business loans, factoring finance

Sale Leaseback financing is an effective way for a company to access quick capital by converting illiquid equity in equipment or real estate into quick cash. Similar to a pawn shop transaction, a Sale Leaseback transaction works in the following way:

 

                                    1.)  You (The Lessee) sell your equipment/real estate to a finance company

                                    2.)  The finance company (The Lessor) agrees to lease the equipment/real estate back to you

                                    3.)  You receive uninterrupted use of the equipment/real estate in exchange for a monthly payment

Sale Leaseback financing comes with many advantages as opposed to other forms of financing. Unlike a regular asset-based loan or a mortgage, a sale leaseback enables a borrower to unlock 100% of the value of its assets, as opposed to the standard 50-65% LTV offered by ABL and mortgage lenders. Sale Leaseback financing is also 100% tax deductible where the Lessee can write-off its entire lease payments, unlike a mortgage where a borrower can only deduct interest and depreciation expenses. Sale Leaseback is also structured as an off-balance sheet transaction that does not increase a company's debt load while increasing its cash-flows with the sale of its assets.

 

Sales Leaseback financing is ideal for companies who want to increase cash-flow that cannot access traditional debt products or are looking to clean up their balance sheets and retired other forms of debt.



Transaction Size:  $250,000 to $100,000,000

 

Advance Formula:  Up to 100% FLV on eligible hard assets such as machinery & equipment and real estate.

 

Criteria:  Sectors best suited for an sale leaseback are companies that use high-cost hard assets for operations. For real estate, typically structured as a NNN lease where the lessee is responsible for utilities, insurance, maintenance, and taxes. 3rd Party appraisal is typically required.

 

Features:  Fast closings - term sheets can be delivered within 2 days or less. No financial covenants. No credit check required. Fixed monthly payment. Greater leverage. 100% tax deductible. Less costly compared to Mezzanine or other forms of financing. Can be classified as either Operating or Capital Lease.

 

Thanks! Message sent.