Sale-and-leaseback

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A sale-and-leaseback transaction occurs when one party, often a corporation, sells assets such as real estate to another party, often a financial institution, and at the same time enters into an agreement to lease the assets for a pre-determined period of time. Reasons for such a transaction include the desire to free up cash, reduce assets held on the balance sheet, focus on core activities, or to shift risks related to changes in real estate prices.

In other words, a sale-and-leaseback transaction takes place when a business sells off fixed assets for cash and lease or borrow them from leasing companies.

[edit] References

• Investorwords.com [1]