Sale and Leaseback
Refinance options to help unlock the cash tied up in your equipment & assets.
Sale and Leaseback (in effect a Finance Lease) enables a business to sell unencumbered assets (i.e. owned assets) back to a finance company who in return, will release some of the value in those assets back into the cash flow of the business. HCFL offer machinery refinance and finance options to support you in getting value back from your assets.
The purpose of undertaking a Sale & Leaseback can be for a variety of reasons, to include:
- Raise additional cash for working capital
- Refinance assets subject of a current finance agreement over a longer term (i.e. to reduce monthly payments on the loan)
- Raise finance against the assets of a business you wish to purchase (such as a competitor), using the cash raised as part of the acquisition costs
- Finance "owned" assets as part of the security in a larger transaction (e.g. the purpose of a freehold property)
HCFL can help you unlock the cash tied up in your vehicles, with machinery refinance and finance options
How does Sale & Leaseback work?
Typically, Huxley Corporate Finance will ask you for a full description of the assets to include Make, Model, Year of manufacture and current condition. We will then get a desk top valuation undertaken free of charge on the asset(s), to establish the current market value (normally the forced sale or trade in value). A lender will normally advance between 60-85% of an assets value, dependent on the required loan term and the rationale for the Sale and Leaseback.
What types of assets are applicable for inclusion in a Sale and Leaseback?
Businesses can arrange Sale and Leaseback Finance against cars, commercial vehicles, plant and machinery. Below are of some of the more popular assets that can be financed;
- Motor cars
- Commercial vehicles
- Buses & Coaches
- Printing presses and finishing equipment
- Engineering equipment (CNC mills & lathes)
- Fork Lifts
- Other assets that are long life, identifiable and have a resale value
How long can a Sale and Leaseback loan be arranged over?
The minimum loan period is twelve months and can be as long as five years. The funding term is usually determined by the age of the asset at the point it is refinanced and its expected remaining working life/future value.