When a company has all of the equipment they need to operate profitably, it would seem they are in a great position. But sometimes a business with lots of capital tied up in equipment and machinery struggles to fund operations or leverage opportunities for growth. A sale-leaseback strategy allows a business to sell ownership (but not usage) to a provider, then lease that equipment back. This can be a great solution for you if you are rich in equipment, but low on cash. As you explore your options for a sale-leaseback partnership with a financing company, you may wonder: what kind of equipment can qualify for a sale-leaseback program?
Leverage These Assets For A Sale-Leaseback?
Almost all types of working, fair-valued equipment and machinery can be leveraged for a sale-leaseback program. Clients can choose to lease back their equipment used in many industry sectors including: Agriculture, Automotive, Construction, Technology, Fitness & Healthcare, Manufacturing, Transportation, Hospitality, Oil & Gas, and more. Equipment for a sale-leaseback must be:
- Owned outright by your company.
- Free of any liens or encumbrances.
- In good working condition with significant operating hours still ahead.
- The equipment needs to have a quantifiable value in the marketplace.
For specific examples of industry-specific assets
you could leverage for a sale-leaseback agreement, read Assets You Can Lease.
So What Exactly Is A Sale-Leaseback?
A sale-leaseback program is a financial agreement that allows a business to sell equipment or machinery assets to a financing provider for fair market value, then lease back those same assets from the leaseholder with a manageable monthly payment plan. This arrangement is ideal for business owners who have capital tied up in equipment that is critical to their operations to leverage that investment to fund expansion, partner buyouts, new streams of revenue, special projects, and more.
When you choose a sale-leaseback program from a reputable financial partner it is easy to use equipment you already own to increase cash flow. Here is how it works:
Step 1: Select Your Collateral- decide which assets (equipment) you wish to sell. These pieces remain in your possession (you don’t have to physically present them to the buyer).
Step 2: Negotiate Your Contract- collaborate with your leasing company to agree on terms such as the value of the equipment, your payment terms, and the duration of your lease.
Step 3: Transfer Title To Your Lessor- transfer title (ownership) of the equipment assets from your business (the lessee) to your leasing company (the lessor).
Step 4: Payment- a lump sum payment of cash is paid to your business and you can use the increased cash flow for operations, payroll, expansion, new technology, or whatever else your business needs to thrive.
The Benefits Of A Sale-Leaseback Program
A sale-leaseback agreement with your financing partner can be completely customized to meet your financial requirements and the goals you have for your company. The benefits of a sale-leaseback program include:
- Immediate Available Cash Flow
- Streamlined Budget Management
- Mitigated Risk
- Tax Benefits
- Zero Interruptions To Operations
To learn more about the pros and cons of sale-leasebacks
and determine if this financial solution is right for your company,
read Is A Sale-Leaseback The Right Choice For My Business?.
Sale-Leaseback Financing Solutions With First Capital Leasing
A sale-leaseback agreement can help your business raise capital quickly to maintain or grow operations. This type of financial partnership is ideal for businesses with outright ownership of valuable equipment or machinery assets. A sale-leaseback program simplifies budgeting with fixed monthly payments and reduces liabilities tied to the ownership of expensive assets. If you are interested in exploring a sale-leaseback program (or exploring other suitable financing strategies for your business), connect with our team at First Capital Leasing at 1-888-251-3644 or by our online contact form and get back to business sooner.
First Capital Leasing is a full-scope financial services provider with the knowledge and experience to create tailored financing solutions that meet your needs and your goals for your company. We can help you figure out which strategy can support your current operations now and in the future. We are based in Calgary, but serve businesses across Canada. FOR EASY APPLICATION and quick approval, fill out our online application. You only need to apply once and First Capital leasing will continue to be your financing partner for all your business equipment needs. Approval can usually be completed in less than 4 hours!* If you are ready to explore loans and leasing for your business, call our team at First Capital Leasing at 1-888-251-3644 or fill out our contact form today.
* Subject to credit approval
Q: Is there a maximum transaction amount in a Sale-Leaseback?
A: There is no maximum. We can negotiate on the sale of single or multiple pieces of equipment. Contact our team to discuss your capital needs and the equipment you have available.
Q: How does my business explore a sale-leaseback arrangement with First Capital?
A: Our process is simple:
- Choose the equipment you wish to sell. Confirm the full asset details.
- Complete our online application, which is instantly submitted to our credit team. Existing customers do not need to re-apply.
- Once approved, a First Capital team member will contact you to discuss your financing options. We will arrange for the transfer of title. Documentation is then provided for your review.
- Upon receipt of all required documentation, our funding team will work on payment remittal to your business.
If you have any questions or need more information about which First Capital financial solutions might be right for you, call us at 1-888-251-3644 or fill out our contact form today.
Q: How quickly can I receive payment after making a sale-leaseback arrangement?
A: Payment for your sale-leaseback contract can be remitted to your company as quickly as 48 hours after all documents are signed