[UPDATE: April 24, 2022]
What Is a Sale-Leaseback?
In a sale-leaseback transaction, a company sells its equipment or fixed assets to Atalaya Leasing and our firm leases the equipment back for a set term with no interruption of use.
Benefits of Sale-Leasebacks
Sale-leasebacks are a fast and efficient way to transfer equity in equipment to liquidity. These transactions also deliver the following benefits:
• Improved Cost of Capital by Leveraging Unencumbered Assets
Equipment leases have a lower cost of capital than other forms of financing. Since sale-leasebacks are secured by equipment, longer terms and lower payments are available.
• Potential Tax Benefits
Certain lessee structures often qualify for tax deductions.
• Hedge Against Rising Interest Rates
By locking in a fixed lease payment, lessees can avoid fluctuations in market rates and potentially obtain a lower cost of financing than corporate debt given asset backed financing.
• Leverage or Monetize Existing Unencumbered Assets
Companies can expand portfolio value by reinvesting sale-leaseback proceeds into operations.
• Additional Source of Liquidity
With a sale-leaseback, companies can unlock liquidity and put it to work.
• Ease of Execution
Faster than a traditional capital raising process, sale-leasebacks are not disruptive to existing capital structures and have lower transaction costs.
When to Consider a Sale-Leaseback
A sale-leaseback makes sense for companies seeking additional sources of capital. Proceeds can be used to bolster liquidity, fund growth initiatives, or for dividend recaps.
Atalaya Leasing can work with borrowers to structure transactions to meet their financial and or operational objectives. Available structures can include tax leases or capital leases depending on underlying equipment type.
Types of Equipment Considered
Many equipment lessors only offer sale-leasebacks for new equipment, but Atalaya Leasing will consider used equipment as well. Our firm has helped clients unlock equity in software, licenses, soft assets, manufacturing, IT, materials handling, vehicles, construction, healthcare equipment, and many more equipment types.
This is not an investment recommendation or a solicitation to become a client of Atalaya. The information contained in this document is provided solely to help potential transaction counterparties evaluate what types of investments may be interesting to Atalaya. This information is intended solely for the person or entity to which it is provided. Any review, retransmission, dissemination, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. ©Atalaya Capital Management LP. All Rights Reserved. As used herein, the term “Atalaya” refers to Atalaya Capital Management LP, together with its affiliates, subsidiaries and affiliated companies. Each affiliate and subsidiary of Atalaya is separately organized and none of these companies are responsible for the obligations of the others. Affiliated companies refers to companies that may be owned, in whole or in part, by investment funds managed by Atalaya.”