EQUIPMENT SALE & LEASEBACK

Instead Of Applying For A Business Loan, Consider Selling Your Owned Business Equipment For Immediate Working Capital, Then Lease The Equipment Back To Coninue Use And Re-Pay In Installments!

EQUIPMENT SALE & LEASEBACK

Sell & Leaseback Your Owned Equipment For Immediate Working Capital

What is An Equipment Sale & Leaseback?

An Equipment Sale & Leaseback is a type of transaction where a company sells its owned business equipment to a leasing company in exchange for immediate funding. Then, the company leases the equipment back from the leasing company so it can continue using the equipment in the business while re-paying for the equipment in installments over an extended period and with flexible buyout terms.

Because a sale leaseback is fully collateralized by the equipment, the amount of the loan will be based on the equipment value and is not as dependent on the credit score of the owner although a higher credit score will result in better leasing rates & terms. Because the equipment serves as collateral for the funding, there are typically lower rates and better terms associated with an equipment sale leaseback than with most any type of business loan. However, this also means that if you default on the lease, the equipment will be repossessed - something that would not happen with a Revenue Based Loan.

To initiate a sale leaseback of equipment, the business must own the equipment outright and the equipment must be free of any liens or very close to being paid off. The equipment also must have a resale/auction value, be worth the effort to repossess in case of default on the lease (so high-value assets are most suited!), and the same equipment cannot be collateralized in more than one sale leaseback agreement. Typically, about 50% of the auction value of the equipment is made available in funding.

When the lease in a sale leaseback transaction reaches the end of term, the business has several options. If the business wishes to continue using the equipment, it can work with the leasing company to negotiate a renewal of the lease. If the business no longer needs the equipment, the business can simply return the asset to the leasing company with no further obligation. An early buyout option would allow the business to re-purchase the equipment at a pre-determined fixed price before the end of the lease term.

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Revenue Based & Term Loans For Licensed Medical, Dental & Veterinary Professionals

"An Equipment Sale & Leaseback Allows A Company To Monetize Its Currently Owned Business Equipment While Continuing To Use The Asset!"



Benefits of an Equipment Sale & Leaseback

Quick Funding, Lower Rates & Better Terms, Tax & Financial Advantages, and Flexible Buyout Options

There are several very nice benefits associated with an Equipment Sale & Leaseback including:

  • Easy To Qualify - Minimum Paperwork, Start-Ups & Bad Credit OK
    There is minimum paperwork required for an Equipment Sale & Leaseback and a high credit score is not a requirement. The primary requirement for an Equipment Sale & Leaseback is owning business equipment with auction value so even start-ups and businesses with poor credit can still qualify and get quick funding.

  • Lower Rates & Better Terms
    Compared to other business loan and financing options, an Equipment Sale & Leaseback tends to have lower rates and longer payment terms since the funding is fully collateralized by the value of the equipment.

  • Flexible Buyout Options
    The Equipment Sale & Leaseback offers very flexible end-of-lease buyout options. If the business wishes to continue using the equipment, it can work with the leasing company to negotiate a renewal or extension of the lease. If the asset is no longer needed or needs to be upgraded or replaced, the business can simply return the asset to the leasing company with no further obligation, which makes it an easy way to dispose of old and out-dated equipment. An early buyout option allows the business to repurchase the equipment at a pre-determined fixed price before the end of the lease term and options for $1 buyout and Fair Market Value buyout are also available.

  • Possible Financial & Tax Benefits
    We recommend speaking to your accountant regarding the financial benefits of an Equipment Sale & Leaseback. The Equipment Sale & Leaseback should improve the company's financial position since the proceeds from the Equipment Sale & Leaseback are included in the Profit & Loss Satement. An Equipment Sale & Leaseback also should have a positive effect on both Return On Asset Ratios and Debt to Equity Ratios; and, depending on how the transaction is structured, it's possible to be able to write off the lease payments entirely!

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