We help companies to raise finance by unlocking capital tied up in commercial property. Take on no more costly additional debt. Contact us today to see how we can help your business.
What is a Sale and Leaseback ?
We specialise in Commercial Property Sale & Leaseback Solutions. A Sale and leaseback is a financing transaction where a company sells it's owned commercial real estate and simultaneously leases the property back on a long-term basis. The company retains complete operational control over the property, as if it were the owner.
Long-term leases give the company security of tenure to continue to operate from their premises. Most companies require a lease term of at least 10-20 years.
Sustainable rent is agreed that increases at predictable levels over the term of the lease.
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COMMERCIAL PROPERTY SALE & LEASEBACKS PROVIDES YOUR BUSINESS WITH A SIGNIFICANT CASH FLOW BOOST.
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By selling commercial property to a funder and agreeing to lease it back for a pre-determined time period in return for fixed monthly rental payments, you can unlock capital that’s currently tied up in your commercial real estate and typically use these funds to invest in expansion, pay down debt and reinvest it in the business where the effective return on capital will be greater.
What are the advantages of property sale and leaseback?
TAKE ON NO ADDITIONAL COSTLY DEBT:
Commercial Property Sale and leaseback allows your business to release funds tied up in commercial property, without the need to take on costly additional debt.
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IMPROVE UTILISATION OF CAPITAL:
Allows capital tied up in property asset to be put to more productive use by reinvesting it in the business. Businesses typically invest in further growth and/or pay down debt to improve cashflow.​
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RELEASE UP TO 100% OF A BUILDINGS VALUE:
Improve company liquidity: A bank loan for finance against the asset might yield proceeds of 60%-75% of the building’s value. Selling a property through a sale and leaseback transaction will generate proceeds of 100% of a building’s value.
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STRENGTHEN BALANCE SHEET:
The company balance sheet can be strengthened by removing any debt associated with the property from the balance sheet.
REDUCE RISK:
Commercial Property Sale and Leaseback allows your business to operate from the same premises on a long-term basis whilst avoiding the risks associated with owning property.
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MANAGEMENT BUYOUT (MBO):
Increases the ability of a management buyout as the asset can be removed from the sale.
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DIRECTOR/PARTNER 'BUY IN':
Increases the ability of a new Director/Partner to ‘buy in’ to a company, where the cost of the ‘buy in’ has been restrictive due to the cost of the premises.
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TAX BENEFITS:
Commercial Property Sale and leaseback carries potential tax benefits as the leasing costs are offset as an operating expense.
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INCREASE CERTAINTY:
The fixed monthly rental payments under sale and leaseback make cash flow management a simpler task.
FIXED RATE FINANCING:
Allows you secure permanent, fixed-rate financing:
Unlike traditional bank debt, sale and leasebacks never need to be refinanced, mitigating re-financing risks. With renewal options available after the initial lease term, fixed lease rates can be secured for up to 40 years or more.