A lease-back agreement or, more correctly, a sale & lease-back agreement is one that enables the owners of an asset (normally a significant piece of capital equipment) to raise money by selling that asset to a finance company while retaining the use of it by making an ongoing lease payment. This is most frequently used as a means of quickly raising working capital where more conventional means of doing so (commercial loans, factoring etc) are not available. It is also commonly referred to as asset refinancing.
Sale & Lease-Back Agreement
Whilst this is not the most cost-effective way of raising working capital, if a company is suffering severe cash flow problems and needs an urgent cash injection, this offers one possible solution.
As with other forms of asset finance, BFS can introduce it’s clients to lenders who will provide a lease-back facility, thereby releasing working capital for the business.