Is your expansion being held back due to a lack of capital? Is your debt crippling your business?
If the answer to either of the above is yes and you own the property your business operates from, we may be able to assist with releasing capital from your property.
Many businesses have bought the premises they operate from, obtaining a fixed asset which they hope to see rise in value. However, as the needs of your business change, having such a large amount of capital tied up in a non core part of the business may no longer be the best option. This is where releasing capital from property can often be a good option.
We speak to many businesses who would like to raise capital to expand their business or reduce their debt but cannot find a way to do so. We may be able to assist by advising on a sale and leaseback.
What is a sale and leaseback?
A sale and leaseback is an arrangement whereby a party sells to a buyer on the pre-agreed condition that the buyer immediately leases the property back to the seller.
The key advantages of a sell and leaseback include:-
- Release of funds to enable potential expansion or reduction of debt
- Potential tax benefits by offsetting lease costs
- Seller remains in occupation and day to day control of property
- Improved balance sheet by exchanging fixed asset (often below market value) for cash
Sale and leaseback structures have been used by a number of large companies such as Tesco, Boots, Travel Lodge and several banks. However, sale and leasebacks can also be used by smaller companies in exactly the same way. By providing the purchaser with a guaranteed tenant and income stream they are popular with investors who require low risk investments.