What is Sale & Lease Back.
Sale and leaseback is a financial transaction where a company sells an asset, such as a property or equipment, to a buyer and then leases it back from the buyer for a specified period of time.
Why Sale-and-Lease-Back?
- Immediate access to cash: Sale and leaseback allows a company to free up cash tied up in an asset. This cash can be used to pay off debt, invest in new projects, or fund day-to-day operations.
- Improved cash flow: Leaseback payments can be structured to match the cash flows of the business, which can improve cash flow and provide greater financial flexibility.
- Asset management: Sale and leaseback can help businesses optimize their asset management by allowing them to focus on their core operations rather than managing non-core assets.
- Tax benefits: Depending on the structure of the transaction, a sale and leaseback can offer tax advantages such as depreciation deductions.
- Long-term control: Leaseback agreements can provide businesses with long-term control over the use of an asset, allowing them to continue using it while freeing up capital for other purposes.
