What is a Sale and Leaseback of Equipment?
A financing solution in which a business has ownership of a piece of equipment, sells it to a financial institution (ILS), in order to lease back from ILS for a specific period of time.
The purpose of the Sale and Leaseback Solution is to enable businesses to raise money by off-loading equipment assets at fair market value to a buyer, who will take over the investment on the piece of equipment.
A new lease agreement is created where the business leases the equipment from the buyer for a particular time period. At the end of the lease agreement, options to renew the lease or buy back the equipment is available.