Real Estate Sale & Leaseback

Definition:
developing or renovating raw land or its existing infrastructure.

Examples:
financing can be arranged for car washes, auto repair centers, dealerships, and parking lots. We use additional underwriting criteria to valuate the building as an asset in addition to the inventory of cars or the cash flow from services.


Funding Usages: purchasing land and improvements to land, equipment financing.

Sale & Leaseback Financing also known as Sale/Leaseback Financing involves a business and an outside interest. Under a Sale/Leaseback, the real estate is sold to the outside interest and is immediately leased back to the business. This type of financing frees up capital by gaining built up equity, which is used to invest right back into the business. This allows the business to substantially lower its monthly payments because commercial properties are often leased up to 25 years. In some cases the borrower is given the option to purchase the property back from the outside interest at specific future dates.

Sale & Leaseback financing works hand in hand with Net Lease Financing.

Borrower Benefits: lump sum of cash that can be used for virtually anything, improved balance sheet, retain control of property, defer portion of tax liability because of lease, write off full payment monthly.

Outside/Interest Benefits: acquires property for lower than market value, acquires long-term lease at a premium rate.