Advantages of Sale Leaseback

Why businesses use sale-leaseback

A sale-leaseback converts owned equipment into cash today while you keep using it under a lease. For many Canadian SMEs, it’s a faster, more flexible way to fund growth than stretching a bank line or selling assets outright. Explore the structure here: Refinancing & Sale-Leaseback.

Core advantages

• Immediate liquidity without downtime
  Convert fair-market value into working capital and continue operating the same equipment. Model net proceeds and payments with the calculator.
  
  
• Lower monthly payments vs. a straight loan
  Because leases can include a residual/buyout, the monthly obligation is often lighter than an equivalent fully-amortizing equipment loan. See equipment leases.
  
  
• Preserve bank capacity
  Raise cash without consuming bank LOC headroom. Keep your line of credit free for payroll, fuel, or materials.
  
  
• Speed and structuring flexibility
  Approvals and fundings are typically quicker and can be tailored (term, residual, seasonal payments), especially for asset-heavy firms in transportation and construction.
  
  
• Potential tax treatment benefits
  Depending on structure, lease payments may be expensed; ownership paths enable depreciation. Always confirm with your accountant, then model both outcomes in the calculator.
  
  
• Consolidate liens and clean up titles
  Close with existing lien payouts packaged inside the transaction, simplifying your capital stack. If you need even more runway, blend with asset-based lending or a working capital loan.
  
  

Quick comparison

Best-fit situations

• You own equipment with clear resale value and need cash quickly.
  
  
• You prefer lower payments now with a known buyout later.
  
  
• You want to keep bank lines open for operating needs.
  
  
• You’re planning a scheduled upgrade at term-end.
  
  

Short case example

A GTA hauler owned three tractors outright but needed cash for new contracts. Mehmi structured a sale-leaseback, paid out a small lien, and delivered net proceeds for onboarding drivers and fuel floats. With a 10% buyout and 60-month term, payments fit cash flow; the fleet kept running and revenue expanded. If you’re replacing units, remember we also sell equipment directly—browse Inventory.

FAQ

Is a sale-leaseback cheaper than refinancing?
Not always. It’s usually more flexible and can lower monthly payments via residuals. Price it against business refinancing.

Can I finance fees and taxes?
Often yes, which preserves cash. Model both ways with the calculator.

What assets qualify?
Mainstream, liquid equipment typically advances best. Check Eligible Equipment.

What if I need even more liquidity?
Pair the leaseback with asset-based lending on AR/inventory or a working capital loan.

How do payments compare to a loan?
Leasebacks often run lower monthly due to a buyout; loans build equity each payment. Compare in minutes with the calculator.

Can startups use sale-leaseback?
If you already own assets, yes. If not, consider equipment loans or leases for acquisition.

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Ready to run the numbers? Use the calculator and feel free to contact our credit analysts via Contact Us for a tailored proposal.
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