Why Use Sale Leaseback?

A sale-leaseback enables a company to sell an asset to raise capital, then lets the company lease that asset back from the purchaser. In this way, a company can get both the cash and the asset it needs to operate its business.

Is a sale-leaseback a good idea?

A sale leaseback transaction can be highly beneficial to a business looking to increase working capital without the confines of traditional debt financing.

Why might a firm choose to engage in a sale and leaseback transaction give two reasons?

There are many reasons to participate in a sale leaseback for the seller company to boost economic growth and opportunities in the future. ... Sale leasebacks allow sellers to structure the lease term to avoid balloon payments, call provisions, refinancing or other common burdens.