Sale Leaseback Asset Finance : 7 Reasons To Consider The Leaseback Financing Solution}

Sale Leaseback Asset Finance : 7 Reasons To Consider The Leaseback Financing Solution

by

stanprokop

Sale Leaseback is an often overlooked form of business asset financing in Canada. How does this financing work, and, more importantly, what are the benefits. Let’s dig in.

Let’s explore those potential benefits around the ‘ lease back ‘ of business assets, including by the way, real estate.

1. Some leasebacks could bring significant balance sheet and tax advantages to your firm. Although probably the majority of transactions are structured as term loans or capital leases it is of course possible to structure a deal as an ‘ operating lease ‘ – allowing the monthly payments to become an immediate expense. Depreciation benefits may also come to bear.

2. The possibility to structure a lease back can really be undertaken at any given time. If there is not immediate financing need (there usually is though!) your company has the opportunity to do a transaction when market conditions on rates are optimal. Today’s current low rates are clearly an example of that

3. The concept of considering lease backs is sometimes just all about focusing on what your business does best. The pro’s call it ‘ core competency. As an example many Canadian chartered banks have sold off their prestigious bank towers on Bay St, utilizing capital in other parts of their business. Pride of ownership is sometimes, unfortunately, a thing of the past in today’s competitive environment.

4. Many transactions in this area focus on elimination of debt – this often improves borrowing ratios which more traditional lenders focus on and allow capital to be deployed in other areas relative to growth, more profits, etc

5. Employing assets via a leaseback will often improve your firms overall return on investment.

6. The unique nature of this type of financing allows you to still use the assets you need – i.e. equipment, real estate, etc – you just don’t own them.

7. In many cases the selling of an asset allows owners to take out equity in their business – More often than not, in the case of real estate the assets are in a separate legal entity anyway.

Although some might view this method of financing as ‘ alternative ‘ in nature in reality its as much ‘ traditional’ in nature. Final rate pricing and structure depend on the overall asset and credit quality.

So should you check out sale leaseback financing? If any, or several, or all of our 7 benefits can help your firm seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with you asset finance solutions.

Stan Prokop

Stan Prokop – founder of 7 Park Avenue Financial http://www.7parkavenuefinancial.comOriginating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. http://www.7parkavenuefinancial.com/sale-leaseback-lease-back-asset-finance.html

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Sale Leaseback Asset Finance : 7 Reasons To Consider The Leaseback Financing Solution}