Leasing AND Sale and Lease back. (1 Viewer)

[aussiechica]

In Finance, (under strategies for managing WC) it has Leasing AND Sale and Lease back.

What exactly is the point of this 2nd option? Why not just lease? Actually, Im not sure i understand the concept of sale and lease back 100%. Anyone care to explain?

Thanks

 

[truly-in-bliss]

sale and leas bk is when a biz sells an asset to someone (X) and then lease it from X....basically they are still using the asset..but the asset is owned by X. biz do this to increase their liquidity...its a good strategy if the biz needs to raise some cash fast.. i think thatz what asset did with some of its machinery in its final days.

 

[Dash]

Ya ya! All true. Its used to increase working capital etc.

Also, by using sale and lease back, maintenance costs are also reduced