SALES LEASEBACK OPTION: (1) What is a sale leaseback?
A sale leaseback is a financing technique that provides an opportunity to raise cash for your business. A sale/leaseback takes place when a business sells real estate it already owns to a third party for its fair market value (‘the sale’) and then immediately enters into a long-term net lease and continues to occupy the property (the ‘leaseback’). Alternatively, the business identifies an existing building that it desires to use. It then allows a third party to purchase that property and immediately enters into a long-term lease to occupy the property.
