“We Arrange Ontario Sale And Lease Back Transactions For Small And Medium Sized Businesses”
Ontario sale and lease back transactions can be a good way to free up capital trapped in the equity found in your equipment.
A sale and lease back transaction involves selling equipment assets to an equipment leasing company in exchange for cash.
Similar to a loan, you would then pay monthly on an equipment lease to repay the amount received, and then have the option to purchase the equipment back at the end of the lease term.
There are basically three different scenarios where a sale and lease back can be performed.
The most common situation for an Ontario sale and lease back transaction is when a business makes a cash purchase of equipment and then decides to finance all or part of the purchase price after the asset is required.
For most equipment leasing companies, as long as the purchase was done within the last 6 months, they still consider it a new purchase and will be open to looking at a sale and lease back transaction.
If the transaction took place longer than 6 months ago, then it will be harder to get a sale and lease back transaction completed as this will conflict with the lending/funding requirements of most equipment leasing sources.
The second most common form of sale and lease back is when a company is in financial distress and is trying to generate additional capital to help with business operations.
This type of Ontario sale and lease back transaction is only provided through asset based lenders that are well set up for liquidation in the event that the financial position of the business further deteriorates after a sale and lease back transaction is completed. The rates for this type of sales and lease back transaction tend to be very high as well.
Ontario Sale And Lease Back Financing To Grow Your Business
The third scenario where an Ontario sale and lease back financing request takes place is when a business is in a financially stable position and needs more capital for growth.
In these situations, there are equipment financing and leasing companies available in both Canada and the U.S. that will fund these types of deals provided that the business has a solid financial base and there is very little chance of default or business failure during the term of the proposed leasing arrangement.
While the rates may be higher and the lending or leasing term shorter than for a new purchase, this can provide the means for more capital to come into the company to take advantage of existing sales opportunities.
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