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Sale Leaseback

Definition - What does Sale Leaseback mean?

A sale leaseback is financial scenario where a real estate owner sells the property to another party and then immediately begins leasing the property back from the party. This is often done in business, when a company needs to generate funds in order to continue operating, or to make investments in things designed to increase revenue for the business.

Justipedia explains Sale Leaseback

An example of a sale leaseback would be a ship building company who sells its facility to a private investor and then begins renting the property right back from the investor. The ship building company may take the money from the sales and buy special equipment that it needs to be more profitable. So, the private investor will profit from the rent payments on the real estate, and the ship building company will have more funds available to use to try to grow its business.

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