Can you sell and leaseback your property to release some funds for your business?
With many businesses struggling at the moment in the current economy, it is always useful to consider alternative methods of investing in your business. If you own your business property, could one option be to sell the property and then lease it back to your business? Is this leaseback option for you?
Sale and leaseback works on the basis that you sell your commercial property to a funder, but only on the understanding that you will be able to lease it back for an agreed time period, for which you will provide fixed rental payments.
This has a number of benefits for you. It will unlock a significant amount of capital which you can then inject straight back into your business. But you will not have to move premises, thereby ensuring that the fundamental operation of your organisation can remain the same. Offloading the ownership of the property also reduces the risks involved. There are even tax advantages, as you can offset the leasing costs as an operating expense.
Furthermore, it is likely that a sale and leaseback can be completed within a relatively short space of time. You will need to find another party to agree to your sale and leaseback strategy; however, this should not be too difficult, as there are various investors who specialise in such agreements.
Once you have found a suitable candidate, your commercial property conveyancing solicitor can handle the transaction in one go. The costs will be much the same as if you were simply selling your commercial property, although you will need to spend a little extra to ensure you have a watertight lease that protects you as the tenant.
For more information about this article or any aspect of our commercial property conveyancing services, please contact us on 01772 424999/ enquiries@solicitordirect.com or fill in the form below. (there is no charge for initial telephone discussions).
