Equipment already owned
Sale and leaseback of business equipment.
Understand the project information and ownership questions involved in a potential equipment sale and leaseback.
A sale and leaseback sells equipment and leases it back for continued use. Compare net proceeds with all future obligations, and verify ownership and existing financing interests before relying on an expected transaction.
What is a sale and leaseback?
In a sale and leaseback, an organization sells equipment and leases it back for continued use. Recently purchased assets may be considered, subject to review of ownership, condition and the proposed transaction. No purchase price or eligibility is established by this general description.
Prepare the ownership record
Identify the legal owner, original supplier, purchase date, location, serial numbers, and any existing financing. The partner will need to assess the asset and the proposed transaction. Do not send invoices, bank statements, or confidential ownership documents through the initial website inquiry.
- Was the equipment bought outright or financed?
- Are any existing lenders or lessors involved?
- Is the asset installed or readily movable?
- How long do you intend to continue using it?
Review the new obligations
Compare the proposed sale proceeds with the full future payment obligation, fees, and end-of-term provisions. Tax and accounting consequences need independent review. A sale and leaseback is not simply a cash release with no continuing commitment.
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