A sale-leaseback strategy is when a health and wellness business sells an already owned asset to a leasing company and the leasing company will then lease that equipment back to the business with favourable terms. Leaseback financing is structured around the equipment a health and wellness provider owns as a way to create cash flow. When you choose a sale-leaseback strategy, you’ll choose the equipment you wish to sell, even if these assets are still in use at your practice. Next, you and the leasing company will determine the value of the assets, the payment terms, and the loan period. The ownership of the wellness equipment will then be transferred to the leasing company and a lump sum payment will be paid to you, the business owner, giving you the working capital you need while still retaining physical possession and continued use of the medical equipment. Sale-leaseback strategies are a great opportunity to increase cash flow as they offer flexible financing, tax benefits, and available capital.
The Benefits Of A Sale-Leaseback Strategy
Free Up Capital. By utilizing a sale-leaseback for your equipment leasing, you can create cash flow by recouping the value of the equipment you have already purchased. Health and wellness businesses often need a variety of specialized equipment that can be costly, and purchasing that equipment may have compromised your ability to create cash flow for other expenses. But the equipment is necessary for generating income. This is when a sale-leaseback strategy can benefit you; when you sell your equipment and then lease it back, you have much smaller payments spread out over a longer period and can afford other expenditures in the meantime.
Equipment Can Sell For A Great Price. When selling your equipment to a leasing company, it will be evaluated. Sale-leaseback companies are highly skilled at determining the value of equipment and can provide a fair market price. By selling to a sale-lease company you won’t be undercut, as you might be in an auction or through an independent sale. And you are still able to continue using the equipment to generate profits.
Tax Advantages. When equipment is leased, the payments can be deducted, allowing health and wellness providers a huge tax advantage.
Offers An Option To Help Businesses After A Purchase Is Made. Some business owners may have a plan to buy their equipment outright initially and then regret this choice later. This is particularly true for businesses that opened right before the pandemic hit and who have been unable to generate their projected profits. A situation such as this is completely unexpected and can cause the company to struggle, but a sale-leaseback option gives these businesses an opportunity to take a leasing approach instead, ensuring they have the cash flow even with their adjusted profits.
A Sale-Leaseback Option Allows Flexibility. When a business sells its wellness equipment for a leaseback, the leasing payment amount, payment deadlines, and terms can be discussed with the leasing company to design a payment structure that works best for your business. Tailoring the arrangement to your unique business and financial situation will give you the best plan for increasing cash flow for your business. A great leasing company will also offer you and your business support and advice during each stage of the process to help you get the best solution possible for your business.
Partner With First Capital Leasing For A Sale-Leaseback
If you are interested in freeing up working capital for your health and wellness business through medical financing or medical aesthetics financing, First Capital Leasing is the sale-leaseback partner you need. First Capital Leasing is a Calgary-based financial business solutions company that can free up capital while maintaining use of your vital medical equipment. The team at First Capital Leasing has spent more than 25 years helping thousands of businesses with their equipment financing needs by providing flexible and beneficial sale-leaseback programs tailored to suit the specific needs and budgets of each business. If you are looking for a quick way to inject cash and working capital into your business, then a sale-leaseback strategy could be right for you. To partner with First Capital Leasing, call 1-888-251-3644 or fill out the online contact form.
FAQ
Q: Is there a minimum and maximum lease amount?
A: The minimum leaseback arrangement is $5000 with no maximum. Connect with our skilled team to explore the options available for your business.
Q: How quickly can I receive payment after making an arrangement?
A: Payment for your leaseback contract can be remitted to your company as quickly as 48 hours after all documents are signed.
Q: How do I apply?
A: We have an easy application process. Apply Here. Once you have applied, there is no need to apply again. We will continue to partner with you for all your business financing needs.