A sale
and
leaseback
financing
transaction
is where
the
company
sells it
free and
clear
assets
and
leases
it
back simultaneously.
These
transactions
can
range
anywhere
from
$50,000
to
$6,000,000.
At
USCCLG,
we
specialize
in
the
following
types of
industries.
| • |
construction equipment |
| • |
manufacturing equipment |
| • |
production equipment |
| • |
yellow iron |
| • |
dump trucks and trailers |
| • |
agricultural and farm equipment |
| • |
and other heavy equipment |
Allow us
to
explain
a little
more...
These
seasoned
lenders
have
come up
with
many
industries'
standards
to make
the
available
credit
pretty
much
available
to
anyone.
The
first
area
that
the lender
will
consider
is the
the
value of
the "free
and
clear
asset"
that is
going to
be sold
and
leased
back.
Each
lender's
formula is
fairly
similar,
but
usually
they
will
give the
value of
the
asset
anywhere
between
50%-70%
of the
auction
value.
(This
auction
value
will
come
from
trade
publications
and
other
standards
in the
industry
for that
particular asset.)
Once the
auction
value of
the
asset is
established,
the
lender
will
look at
the
applicant's
credit.
Some
lenders
will
consider
the
credit
irrelevant,
as they
will
focus on
the
auction
value of
the
asset.
Other
lenders
will
obtain
the
credit
and
grade
them
according.
These
lenders
will
come up
with a
score
and give
the
applicants
different
rates
depending
upon
their
credit
and the
asset
involved.
The
lender
will
lease
these
bought
assets
anywhere
between
24-85
months
back to
the
applicant.
Additionally,
the
lender
will
offer
residual
buyout
clauses
-
anywhere
from 25%
residual to
fair
market
value of
the
asset at
the end
of the
lease.
Sale and
Leaseback
Financing
- What
is
Required?
Usually,
what is
required
from the
applicant
is:
| • |
personal financial statements |
| • |
a lease application |
| • |
a summary telling about the deal and its particulars |
| • |
and a detailed equipment list, identifying the assets to be sold and leased back |
Obviously, bills
of sale
and
title
work
will
have to
be
performed
by the
lender.
The
proceeds
of the
these
funds
can be
used for
working
capital,
debt
re-structuring,
equipment
acquisitions,
and
paying
off
judgements
and
other
liens.
Sale and
Leaseback
Financing
- Unique
Features
Some
other
unique
features
of the
sales
and
leaseback
program
is that
usually
these
transactions
are:
| • |
non-bankable type transactions |
| • |
home ownership isn't required |
| • |
and poor credit isn't an issue! |
In
conclusion,
we
invite
you to
shop
around
for the
best
deal for
yourself
and
understand
all the
particulars
of the
transaction.
We hope
this
article
about
"Sales
and
Leaseback"
financing
helps,
and we
are
confident
you will
see that
our
programs
are the
very
best
available.
.
