Could Sale And Leasback Be The Solution To Your Cash Flow Problems?

Tuesday, 1. June 2010

As companies look at various ways to raise money, as we slowly emerge from recession, some are now looking at their company cars as a possible way to raise funds for expansion. For those that don’t want to approach their bank to increase their borrowings this could be a good alternative. The scheme, known as sale and leaseback, is an arrangement between a leasing company and the customer whereby the leasing company buys the vehicles at a trade value based on the vehicles’ ages and mileages. They then lease the cars back on a traditional contract hire agreement, normally taking the vehicles to either 3 years old or 4 years old. So if a car was leased back that was 14 months old the new lease would last for 22 months taking the car to 3 years old. The car would then simply be handed back and a lease taken out for a new car. Some lenders need at least 3 cars to be in the fleet before they are interested but there are some lenders that would provide a sale and leaseback for just one car if the credit was good. Unfortunately I know of no leasing companies that would provide this facility for consumers. By Graham Hill