Sale and Leaseback

A sale and leaseback on a piece a equipment or other asset is an useful way of raising finance from an asset whilst still retaining the right to use to use it. 

Businesses most commonly use sale and leaseback deals for land and buildings, but they now also apply them to heavy and expensive equipment.

Advantages of sale and leaseback

• Access to cash tied up in assets already owned
• No downtime required or retraining on new equipment
• Cash raised can returned to shareholders
• Frees up capital
• Property and ownership risks are transferred to the buyer

Disdvantages of sale and leaseback

• The businesses outgoings increase on the profit and loss perspective
• Increased costs
• There may be capital gains tax implications. A company can generate a profit from a sale and leaseback using a finance lease if the lease’s capital value exceeds the asset’s book value at the time of sale.

With our deep accounting and operational insight, we understand both the advantages and risks these financial arrangements present. We’ll help you determine if this strategy suits your business goals.