In today’s business environment, access to capital is vital in meeting daily operations and investing in continuous growth. However, high-interest rates and loan acquisition complexity have seen more investors looking for alternative financing options. Luckily, businesses owning real estate and heavy machinery can enjoy more benefits from the sale leaseback financing option in the following ways.

Maintains Full Operational Control

If you choose the sale leaseback financing preference, you retain control over the sold property. In other words, you can still access and use the asset without owning it. You attain the benefit by simply signing the lease agreement. Further, you get a chance to focus on your business’s core values and growth that you’re looking for around the clock.

Instant Conversion of Assets Into Working Capital

You may have illiquid assets in your business. Sale leaseback financing frees up capital to move toward business growth and efficiency. Therefore, taking it means accessibility to financial resources that asset ownership previously blocked.

No Financial Covenants

Contrary to bank loans, you don’t have to observe any financial covenant in the sale leaseback financing pick. While at it, there are no borrowing restrictions or debt covenants. The seller and the buyer share the ownership rights through the leasing contract, which restrains the agreement from breaching.

Flexible Lease Terms

As the sole proprietor, you have unrestricted control over your property, even after selling and leasing it back. Contrary to a common misconception, you have higher bargaining power while drafting the leaseback arrangement. As the lessee, you define the rental rate and circumstances under which the contract may end in termination. In a nutshell, you possess the freedom to set lease terms.

Tax Advantages

Depending on the property value, you stand in a better position in its taxation, keeping your hands off the task. If you’ve sold your property to a regulated real estate company, the tax charged tends to be less in most terms. Lastly, you can ask for a tax deduction from the current payable profit if you agree to share the taxation cost with the investor.

Improves Your Creditworthiness

One of the reasons to opt for sale leaseback financing is to pay off short-term and long-term business debts. Prompt payment boosts your creditworthiness and improves your credit score. With time, your loan limits grow to the extent of fully financing your business operations with a single loan application.

So, are you looking for an asset finance company to overcome a financial hump? Contact KMS Funding today and get the best out of our sale leaseback financing product.