Sale-leasebacks - Borrow your own money

Need an influx of your own cash? Consider a Sale-leaseback.

While real estate is typically an illiquid asset and isn't easily bought one day and sold the
next, small business owners can put the bank on hold by making the most out of their
own capital.

What is a Sale-leaseback transaction?
It is when a business owner who owns the property where its business resides, sells the
real property, but not the business and then "leases back" it's own space from the new
property owner. This allows a business owner to receive cash for the value of the real
estate today while simultaneously signing a lease that protects its business's location.

A sale-leaseback has many uses for a small business owner, especially if a lender isn't
very cooperative. Often banks want to see an extensive track record before lending
capital that a growing business might require for expansion in the form of more
employees or an additional location.

Business owners that properly plan for succession or retirement can use a
sale-leaseback option to help ensure that when a business has run its course and ready
to close that the business owner is not stuck with a business real estate mortgage and no
business income to pay for the expense. Sale-leasebacks offer flexibility to a small
business owner in terms that the business owner can ultimately controls in the form of a
lease.

I have personally participated in a sale-leaseback and while the concept initially made me
uncomfortable, upon further analysis, it became an unbelievable opportunity for my small
business. We eliminated a huge debt, improved our balance sheet, protected the
business location and controlled the future lease terms. Sometimes giving away real
estate ownership, but not necessarily control makes sense. Maybe even dollars and
cents.