Sale and Leaseback Financing

Sale and Leaseback Financing
Sale and Leaseback Financing - What is it?

A sale and leaseback financing transaction is where the
company sells it free and clear assets and leases it back
simultaneously. These transactions can range anywhere from
$50,000 to $6,000,000. This article will encompass the
following types of industries and discuss its particulars:

Construction equipment,manufacturing equipment, production
equipment, yellow iron, dump trucks and trailers,
agricultural and farm equipment, and other heavy equipment

Many seasoned lenders have come up with many industries
standards to make the available credit pretty much
standard. The first area that the lender will consider is
the the value of the free and clear asset that is going to
be sold and leased back. Each lender's formula is somewhat
similar but they usually value the acquired asset somewhere
between 50%-70% of the auction value. This auction value
will come from trade publications and other standards in
the industry for these particular assets.

Once the auction value of the asset and/or assets is
established, the lender will look at the applicant's
credit. Some lenders will consider the credit irrelevant as
they focus on the auction value of the asset. Other lenders
will obtain the credit and grade them according. These
lenders will come up with a score and give the applicants
different lending rates depending upon their credit and the
asset involved.

The lender will lease these bought assets anywhere from
24-85 months back to the applicant. Additionally, the
lender will offer residual buyout clauses anywhere from 25%
residual to fair market value of the asset at the end of
the lease. This will keep the applicant's monthly payment
as low as possible.

Sale and Leaseback Financing - What is Required? Usually,
what is required from the applicant is:

Personal financial statements, a lease application, a
summary telling about the deal and its particulars, and a
detailed equipment list, identifying the assets to sold and
leased back Obviously - bills of sale and title work
will have to be performed by the lender.

The proceeds of the these funds can be used for working
capital, debt re-structuring, equipment acquisitions, and
paying off judgements and other liens.

Sale and Leaseback Financing - Unique Features Some other
unique features of the sales and leaseback program is that
usually these transactions are:

Non-bankable type transactions, home ownership isn't
required, and poor credit isn't an issue!

In conclusion, we suggest you shop around for the best deal
for yourself and understand all the particulars of the
transaction. Hopefully, this article about "Sales and
Leaseback" financing assists you with your decision making.

----------------------------------------------------
J.M Luna has over thirty years experience in the financial
field. This includes accounting and taxes, leasing, hard
asset money and working capital loans, and commercial
financing. U.S Corporate Capital Leasing Group can assist
the startup and seasoned business in all different types of
industries.
http://www.cclgequipmentleasing.com/Sale_Leaseback.htm