How a sale-leaseback works, and why the 90-day window matters

A lot of owners pay cash for equipment because it is the fastest way to get the machine on the floor. A sale-leaseback is how that cash comes back without giving the machine up.

What a sale-leaseback is

In a sale-leaseback the business sells equipment it already owns to a finance company and leases it back on the spot. Nothing moves. The machine stays where it is, the crew keeps running it, and the business gets a check for what it paid. From that point the equipment is paid for the same way it would have been if it had been financed on day one: a fixed monthly payment over a set term.

It is the same transaction as financing the purchase in the first place. It just happens after the fact.

Why owners end up needing one

Most owners who pay cash do it for a good reason. The vendor had the machine in stock, a job was waiting, and running an application felt slower than writing a check. The problem shows up a few weeks later, when payroll, materials or the next opportunity needs the cash that went into the machine.

Other owners in that position have told us the same thing: they did not regret buying the equipment, they regretted tying up the cash to do it. A sale-leaseback undoes that part of the decision and leaves the rest alone.

Why the timing matters

At iFinancial Group a sale-leaseback typically covers equipment purchased within the past 90 days, at up to 100 percent of the invoice. Inside that window the purchase is recent, the invoice is clean and the value is not in question, which is why the advance can run all the way to the invoice amount.

Older purchases are worth asking about. The window is where the process is simplest, not a hard cutoff, and some files can go back further depending on the equipment and the business.

What it takes

It starts with the same one-page application used for any other financing. No tax returns and no audited financial statements to apply. Beyond the application, the review usually works from the invoice and proof that it was paid.

Once the terms are accepted, the paperwork transfers the equipment to the lender and puts the lease in place in one step, and the funds go to the business rather than to a vendor.

What it does not do

A sale-leaseback through iFinancial Group puts a claim on the equipment being financed and nothing else. There is no blanket lien on the business, and nothing in the paperwork puts the business in default over a number on its financials. If you have a bank line, it stays open for everything else, because the equipment is not drawing on it.