A company accomplishes sale-leaseback by conveying the title to its capital assets at their fair market value to a financial institution in exchange for a lump sum payment.  The new owner then leases the equipment back to the original company. It provides the business with a cash infusion and helps improve liquidity and balance sheet.

This arrangement allows the business to raise capital while retaining the use of assets and to buy back the assets at a future date.

Procedure

• Review pertinent information in regard to the subject assets which may include pictures, description, financial statements, etc.
• Present letter of intent which outlines the critical business points that need to be mutually agreed to and will lead to a formal contractual document. 
• Upon execution and agreement on the letter of intent, a contract will be drafted.

Advantages

• Generates cash, improving liquidity
• Provides off-balance sheet financing
• Allows you to focus your assets on core operations
• Reduces the negative impact of depreciation and interest on your income statement 
• Improves financial and performance measurement ratios such as return on assets
• May help you avoid or reduce liability for minimum tax, because tax-oriented leasing,
  unlike ownership, does not create tax preference items

Benefits 

• Diversify your Investments: you are acquiring a significant amount of liability when purchasing the equipment. If for some reason your business suffers, so will your investment in capital assets. It's often wiser to keep them separate. 
• Tax Advantages: Leasing rather than owning the equipment that your business uses offers tax advantages. Leasing expenses can be deducted from operating income. The funds you use to buy equipment for your business (as well as the principal portion of all payments) are considered capital investments, which are not deductible operating expenses. 
• Liquidity: Assets tie up working capital.  Through the sale-leaseback, you are able to turn that equity into cash.
• Flexibility: Leasing offers the flexibility that ownership cannot when you expand or downsize your business.

Equipment Types

• Auto repair equipment
• Construction
• Coaches, buses & shuttle Buses
• Concrete pumps, trucks & cranes
• Commercial signage & related equipment
• Fitness
• Furniture, fixtures & equipment for business use
• Information & technology
• Landscaping
• Laundry machines & dry cleaning equipment
• Machine tools
• Material handling
• Manufacturing equipment
• Medical & healthcare equipment
• Telecommunications
• Trucks, trailers & tractors 
• Others

Sale Leaseback Programs

Program EF210
Sale Leaseback / Asset Re-Sale Program

• Amounts $10,000-$350,000
• FICO 635+ except for restaurant and food related businesses
• FICO 650+ for restaurant and food related businesses
• Available to all types of business entity
• Stated income
• 2-year time in business
• Equipment owned free and clear
• Good payment history on equipment lease property tax
• No open lien or past BK
• Applicant's equipment is acquired with a bill of sale, then applicant leases it back
• Applicant buys back the equipment for $1.00 at the end of the lease
• LTV 75%-90%
• Leases are set up with an initial amount of $75,000 and a typical transaction size of $45,000 for up to 8 consecutive lease parts or more, depending on the structure and the amount of equipment financed
• No equipment restriction unless they are too old
• Funds open to personal or business use

• Stated income for amounts $10,000-$75,000
• 2-year business and personal tax returns, interim financial statements and personal financial statements form owners of 20% or more required for amounts $75,000-$150,000
• FICO 680+
• 2-year time in business
• Equipment owned free and clear
• No open lien or past BK
• Structure is accomplished with one single term loan/lease facility
• Ownership reverts back to the applicant at the end of the loan term
• No down payment unless the applicant lacks credit strength
• No equipment restriction unless they are too old
• Funds for general business purpose only