Sale-Lease Back Financing

Sale-Lease-Back

Using existing equipment, businesses may be able to get needed capital. With Sale-Lease Back financing, the company’s current equipment remains under you, the business owner’s full control and is never taken out of production. It’s a simple transaction. Your business sells your equipment and leases it back. The capital your business receives from this transaction can be used for anything your business needs, without restriction. A Business Finance Consultant knows the ways of these lenders and has the contacts to secure financing for virtually any type of business. 

In addition to the initial cost and obsolescence, leasing your equipment can also provide your business with a substantial tax advantage. While you should always consult with your tax adviser first, most equipment leases can be structured so that you can write off 100% of the annual lease payments. By contrast, current tax laws only allow a business to write off the interest paid on loans. However, because a lease is a rental and the business is only using the equipment, the business can usually write off all of the monthly lease payments just like any other legitimate business expense.

Sale-Lease Back Financing

Big businesses prefer this option because they don’t want to own millions of dollars in equipment. This equipment will depreciate substantially with the day-to-day usage. Whoever owns the equipment is responsible for the depreciation on their balance sheet. Also, large corporations may require that the board of directors approve any new loans to the business since. This can make it difficult for the management of the business to operate efficiently. But a lease is not a loan and therefore may not require approval by the board for the managers to get the equipment they need. In smaller businesses this can also be an advantage because they will not show additional debt on the balance sheet that will affect their ability to borrow money in the future. If you are considering selling your business, this may also make your company more attractive to potential buyers since you will be showing less debt on the balance sheet.

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