Are you a business owner looking for a flexible financing solution to boost your working capital? Clearlease Financial offers an innovative approach called equipment sale-leaseback. In this guide, we’ll walk you through the ins and outs of this financing option, its benefits, and the equipment that qualifies.
What is an equipment sale-leaseback?
An equipment sale-leaseback is a financial arrangement where you utilize your business’s existing equipment, which is fully paid for, as collateral for a loan. This allows you to unlock the value of your equipment without losing its use. It’s important to note that equipment currently under a lease or loan cannot be used for a sale-leaseback. The equipment should be in good condition and retain its value.
Why would I use my equipment to get working capital?
There are several compelling reasons to consider equipment sale-leaseback as a means to access working capital:
- Get up to 70% of the original purchase price: You can receive a substantial cash injection, up to 70% of the original purchase price of the equipment you own, providing a significant boost to your working capital.
- Retain equipment usage: Your equipment remains on your property and continues to be available for your business operations, allowing you to maintain continuity without any disruption.
- Tax advantages: By leasing back the equipment, you can typically write off 100% of the monthly lease payments as business expenses, leading to potential tax savings.
- Flexible use of funds: There are no restrictions on how you can utilize the funds obtained through equipment sale-leaseback. Whether you need to expand your business, invest in new projects, or address immediate financial needs, you have the freedom to allocate the funds as per your requirements.
- Unlock idle equity: Equipment sale-leaseback enables you to tap into the equity tied up in your equipment. Instead of leaving it idle, you can leverage its value to generate working capital and fuel business growth.
- No collateral or interference with credit lines: With equipment sale-leaseback, you don’t need to provide additional collateral such as personal or other business assets. Moreover, lease payments do not interfere with your existing credit lines at the bank, preserving your financial flexibility.
What equipment qualifies?
A wide range of equipment types may qualify for sale and leaseback financing, as long as they are owned outright and play a significant role in your business’s daily operations. This includes equipment found in offices, warehouses, manufacturing facilities, and more. However, certain factors such as equipment age and industry restrictions may apply, so it’s important to consult with Clearlease Financial to determine the eligibility of your specific equipment.
In conclusion, equipment sale-leaseback can be a valuable financing tool for businesses seeking to optimize their working capital. By leveraging your existing equipment, you can access funds, enjoy tax advantages, and maintain the use of your equipment. Clearlease Financial is here to guide you through the process and help you unlock the full potential of your equipment. Contact us today to explore the possibilities of equipment sale-leaseback for your business.