Sale leaseback



Sale-Leaseback Financing

Among the various ways to raise capital for growing cannabis companies is a method referred to

as sale leaseback financing. It is one of the primary means that BANGI offers its tenants so they

may avoid incurring large debts or employing private equity. Whatever your specific situation

may be, we can assure you that the real estate and financing executives on our team have more

than 50 years of business development experience to help you employ this financing method


The Sale Leaseback Financing Method

As the name easily suggests, this method involves one business selling one of its assets to

another entity and then immediately leasing it back. Thus the seller no longer owns the asset but

is still able to use it. Real estate and equipment are the types of assets that are commonly sold

and the lease is usually a long-term arrangement. The conditions and rental rate may depend on

the seller’s credit history, buyer’s financing costs, and projected rate of return.

Sale Leaseback Financing Advantages

Since the seller can continue to use the property or equipment it just sold, there would be no

interruptions or delays in productivity. If all other factors remain constant, revenue before and

after the sale should be the same.

The additional capital sale leaseback financing generates comes from the cash investment of the

buyer/new owner of the asset. The seller now has extra monetary resources to pursue other

business goals from paying down debts to purchasing more equipment and expanding operations.

Another benefit that the seller receives is tax savings. Leasing the property or equipment back

essentially turns them from assets to contingent liabilities. The monthly rent in fact is completely

tax deductible as a business expense. These savings can then also be pooled to become extra

working capital.

Sale leaseback financing also has advantages for the buyer. By leasing back the asset, it secured

a fair return of its investment and guaranteed a long-term income stream.

This type of asset-based lending method practically functions as a loan but the rent isn’t so much

a debt payment as an operational cost. Also, unlike typical bank loans, sale leaseback financing

does not require additional collateral other than the property or equipment being sold. Once all

the payments are made the seller regains ownership of the asset.

We encourage you to contact our financing team to initiate a dialogue to determine how BANGI

can support your expansion efforts through our innovative and unique sale-leaseback financing

vehicles tailored specifically towards the booming cannabis industry.