Sale Leaseback

Sale leaseback is a term of art that describes a process by which a business or commercial enterprise sells an asset and leases it back from the new owner in order to continue to use the asset in the business or commercial enterprise. Sale lease back business loans is commonly used in the context of commercial real estate when a business owner no longer wants to have substantial equity tied up in a parcel of real estate, but still needs to use the location for his or her business. A real estate sale leaseback allows the business owner to sell the piece of real estate and use the equity such owner had in the real estate for other purposes, but continue to use the property in his or her business. With sale leaseback real estate instead of being an owner of the property, the business is simply a lessee of the property. A sale lease back is often appealing to the new buyer of the property because it allows him or her to invest in a certain piece of commercial real estate without having to risk delay in procuring a tenant. Every month a piece of real estate remains vacant is a loss to its owner. When an individual or business can buy real estate in a sale lease back situation the lease is negotiated as part of the sale and therefore, the new owner is assured that the property will not suffer any vacancy at least until the sale leaseback arrangement has expired. The real estate industry is not the only one that may use a sale leaseback. Another similar type of arrangement is an equipment sale leaseback, which involves the sale of equipment needed in a business to a new owner simultaneous with entering into an arrangement to lease back such equipment for use in the business of its previous owner.