Advantages of sale and leaseback
At WestWon, we have written hundreds of sale and leaseback leasing agreements on numerous asset types. If you are looking to carry out a sale and leaseback agreement, please contact us! However, to learn more about the benefits, please read below. Here we take a look at the advantages of sale and leaseback on equipment:
• A quick and simple way to raise finance
The process is simple and the timescale can be anything from 48 hours to one week before your receive the cash.
• Sensible interest rates
With a sale and leaseback of equipment, we take our security in the asset. This is less risk than offering an unsecured loan, hence the interest rates are normally cheaper.
• Does not use up existing lines of credit
No need for you to speak to your Bank. A sale and leaseback does not affect any invoice discounting / factoring arrangements you already have in place.
• It’s a lease, not a bank funding line
Some companies have banking covenants where they cannot take out other third-party loans. We will lease the equipment back to you, hence it does not fall foul to any restrictions like this that you might have.
• You still have full use of the asset
You will still have full use of the equipment and will be matching the benefit you derive to the repayment you make each month. On smaller deals (under £500k) we will not look to take a debenture or a second charge.
What can we use the money for and do you (WestWon) need to know why?
Working capital, management buyouts, deposits, new buildings… the list goes on. If it’s a management buyout or acquisition, you can read more in our article on “Raising funds for a management buyout or acquisition by a sale and leaseback (coming soon).”
We really do need to know the reason why you are looking to undertake a sale and lease back. We often do see companies looking to do a sale and leaseback to raise money as a last resort. Leasing companies do not like to lend in these situations.
How does the money come to you?
The leasing company / finance company will pay you directly by bank transfer.
What assets can you do a sale and leaseback on?
- Plant and machinery
- Company cars, lorries, vehicles are a popular asset choice
- General equipment
- Warehouse racking, forklift trucks
The list goes on…
If you would like more information on the advantages of sale and leaseback, or any other finance needs you may have, then please don’t hesitate to contact us. You can email us on email@example.com, or alternatively you can call us on 01494 611 456. You can also see more over on our LinkedIn page.