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.
This article will encompass the following types of industries and discuss its particulars:
” construction equipment
” manufacturing equipment
” production equipment
” yellow iron
” dump trucks and trailers
” agricultural and farm equipment
” and other heavy equipment
Many seasoned lenders have come up with many industries standards to make the available credit pretty much standard. 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 somewhat similar but they usually value the acquired asset somewhere between 50%-70% of the auction value. This auction value will come from trade publications and other standards in the industry for these particular assets.
Once the auction value of the asset and/or assets is established, the lender will look at the applicant’s credit. Some lenders will consider the credit irrelevant as they 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 lending rates depending upon their credit and the asset involved.
The lender will lease these bought assets anywhere from 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. This will keep the applicant’s monthly payment as low as possible.
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 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 suggest you shop around for the best deal for yourself and understand all the particulars of the transaction. Hopefully, this article about “Sales and Leaseback” financing assists you with your decision making.
J.M Luna has over thirty years experience in the financial field. This includes accounting and taxes, leasing, hard asset money and working capital loans, and commercial financing. U.S Corporate Capital Leasing Group can assist the startup and seasoned business in all different types of industries.
Franchise Finance in Canada calls for both you as the owner, as well a lender, to, on a combined basis, complete the financing you need for a franchise acquisition. In Canada you could of course be acquiring a new turn key franchise from a U.S. or Canadian franchisor, or in many cases also considering the purchase of an existing franchise.
Several key questions are always table by our clients – inevitably they are:
-How much do I have to put into the business as my own investment?
-Where do the other funds come from?
And, oh yes, how long does the process take!
We always encourage clients to start thinking of financing very early in the process. A great place to start is often, guess who? Your franchisor! That is simply because if they have a multi unit system already in place they usually have a strong indication of how these franchises were financed. Information you obtain from the franchisor or other existing franchisees is invaluable, as the franchise financing journey is a puzzle to many.We also are quick to add that you should never expect financing assistance from a franchisor in the form of loans, etc – The franchisor grows their business from selling you franchises, not loaning you money.
In the U.S. the majority of franchises are financed via the SBA, which stands for Small Business Administration. This is a government sponsored / funded loan, and Canada has a similar program that is commonly known by several different names – they are SBL, CSBFL, and BIL. All of these are acronyms for the same program.
You should most certainly incorporate your business to both gain access to business credit as well as limit personal liability. Personal liability under the Canadian version of the program is limited to only 25% – that’s a great deal for the business owner, as it of course limits your risk.
Most franchises in Canada are financed via this program. Sounds good so far right. We simply point out to clients that achieving success in this financing program is simply a case of:
- ensuring you understand the basics of the program – i.e. what it does not do
- complying with the information required by the program
When planning your franchise financing focus on what amount you can contribute personally to the business, and also understanding the components of financing you need. What are those components? They are:
- Soft costs ( example – franchisee fees, pre paid rent, etc )
- Leaseholds ( if required )
- Working capital
We can’t over emphasize the need to work with an experienced and credible business financing advisor who preferably has a track record of franchise financing success. A thorough business plan, the right advice, and understanding you’re financing needs – all are critical elements to franchise financing success!
Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions.
Professionals in corporate finance assist organizations generate money to run the business and grow the business. Theses specialists work to support and expand business operations, put together acquisitions, manage cash resources, and ensure future economic stability.
To succeed in this field you will need strong analytical and problem solving skills. Corporate finance officers need to be well rounded and able to communicate clearly to others. These professionals’ design and implement financial policies, plan the financial program, and monitor cash resources.
Those who strive to work in the field of corporate finance will need to have at least a bachelors degree in finance or accounting. Though a bachelor’s degree in finance, accounting, economics, or business administration is the minimum academic preparation for corporate finance, you will most likely need a master’s degree in business administration or finance. Continuing education is necessary for finance professionals who need to be kept up to date with changes in federal and state regulations as they relate to finance. Some companies will provide their employees with the opportunity to attend graduate courses or attend conferences related to their specialty.
Corporate finance officers often work long hours – upwards of 50 hours per week. The financial rewards however can be worthwhile. Corporate financial professionals earn from $75,00 annually to over $175,000. There are unlimited earnings in this field when you work for major corporations and have many years of experience.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.