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Frequently Asked Questions (FAQ) and our answers related to Sale Leaseback Transactions

Frequently Asked Questions (FAQ) and our answers related to sale leaseback transactions

Take a look at our Frequently Asked Question (FAQ) to immediately and appropriately address your needs. We hope this information will help address any of your questions. If we  have not addressed your concerns here, please do not hesitate to contact us by completing the form below or by giving us a call. See details a the bottom of this page.

1.    What is a sale leaseback transaction?

A sale leaseback transaction is a financial arrangement in which a company sells their property to our investor pool and then leases it back for an agreed-upon period of time.

 2.    What are the benefits of a sale leaseback transaction?

Sale leaseback transactions can provide businesses with access to capital, increased liquidity, improved financial flexibility and access to 100% of the value of the property.

3.    What is the difference between a sale leaseback and a loan?

A sale leaseback is where you actually sell your property to an investor pool or third party, whereas a loan is a form of debt.

4.    What is the typical timeline to complete a sale leaseback transaction?

The timeline for a sale leaseback transaction can vary, but typically takes between 6-12 weeks from start to finish.

5.    How is the sale leaseback transaction structured?

Sale leaseback transactions are structured as a sale of the asset, followed by a lease agreement leasing the property back to the seller.

6.    What are the tax implications of a sale leaseback transaction?

Sale leaseback transactions may have tax implications, both for the seller and the buyer, and should be discussed with tax advisors.

 7.    What types of businesses and industries can benefit from a sale leaseback?

Businesses and industries that are asset/real estate-intensive, such as manufacturing, energy and other businesses that are equity tied up in real estate can benefit from sale leaseback transactions. Auto Dealerships, Medical Office Buildings, Hotels and Resorts, Green Energy Projects such as wind, solar, and Manufacturing Facilities.

8.    How is the purchase price determined in a sale leaseback transaction?

The purchase price for a sale leaseback transaction is typically determined based on current market value and the expected future cash flows associated with the asset according to market conditions.

9.    What are the typical payment terms for a sale leaseback?

Payment terms for a sale leaseback transaction are monthly lease payments similar to any other lease agreement.  

10.    What are the legal requirements for executing a sale leaseback transaction?

Legal requirements for executing a sale leaseback transaction typically include a contract between the parties, an environmental assessment, and any other necessary permits and licenses. Our financial experts at Quantum Global can assess and confirm exactly what's needed to set up a sale lease agreement.

11.    What are the common challenges to avoid when entering into a sale leaseback agreement?

Every financial transaction has its share of challenges. Our financial experts at Quantum Global can help navigate to make the process seamless. 

12.    What types of documents am I required to provide when qualifying for a sale leaseback?

Documents required for sale leaseback transactions typically include 2 years of financial statements and a trailing 12 month income statement and a current balance sheet. Upon receipt of these documents we can issue financial terms of a sale-leaseback agreement within 7 - 10 business days.

13.    Who is responsible for maintenance and upkeep of the asset during the lease period?

This is a triple-net lease. The lessee is responsible for maintenance and upkeep of the asset during the lease period.

14.    What happens at the end of the lease term?

At the end of the lease term, the lessee may choose to purchase the asset, renew the lease agreement or vacate the property. You are not obligated to sign a new lease term. 

15.    Is a sale leaseback transaction the best option for my business?

Sale leaseback transactions can provide businesses with access to capital, improved liquidity, and financial flexibility. Give us a call at Quantum Global and we'll help you determine the best options for you.

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