What is a Sale Leaseback?

If your company is in trouble, and you own your own building you have a few options available to you. If you have an outstanding loan on the building, you maybe upside down with respect to loan to value ratios. This means you owe more than the building is currently worth. A sale leaseback is finding someone willing to purchase the building from the bank and then leasing it to you. While the sale will most likely be a short sale (less than the outstanding loan amount), your bank will be open to this deal, because it lowers their risk. Done correctly, it should also lower your overall monthly expenses related to the real estate portion of your business. A good turnaround professional has knowledge of many parties interested in purchasing and leasing your building back to you.