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Sale & Leaseback
Sale & Leaseback
An explanation
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Sale and Leaseback

TVAF has machinery refinance options to help unlock the cash tied up in your equipment and assets.


Sale and Leaseback (in effect a Finance Lease) enables a business to sell unencumbered assets (i.e. owned assets) back to a finance company who in return, will release some of the value in those assets back into the cash flow of the business. TVAF offer machinery refinance and finance options to support you in getting value back from your assets.

The purpose of undertaking a Sale & Leaseback can be for a variety of reasons, to include:

  • Raise additional cash for working capital
  • Refinance assets subject of a current finance agreement over a longer term (i.e. to reduce monthly payments on the loan)
  • Raise finance against the assets of a business you wish to purchase (such as a competitor), using the cash raised as part of the acquisition costs
  • Finance "owned" assets as part of the security in a larger transaction (e.g. the purpose of a freehold property)

TVAF can help you unlock the cash tied up in your vehicles, with machinery refinance and finance options

How does Sale & Leaseback work?
Typically, Thames Valley Asset Finance will ask you for a full description of the assets to include Make, Model, Year of manufacture and current condition. We will then get a desk top valuation undertaken free of charge on the asset(s), to establish the current market value (normally the forced sale or trade in value). A lender will normally advance between 60-85% of an assets value, dependent on the required loan term and the rationale for the Sale and Leaseback.
What types of assets are applicable for inclusion in a Sale and Leaseback?
Businesses can arrange Sale and Leaseback Finance against cars, commercial vehicles, plant and machinery. Below are of some of the more popular assets that can be financed;

  • Motor cars
  • Commercial vehicles
  • Buses & Coaches
  • Printing presses and finishing equipment
  • Engineering equipment (CNC mills & lathes)
  • Fork Lifts
  • Other assets that are long life, identifiable and have a resale value
Thames Valley Asset Finance has arranged Sale and Leaseback Finance for many UK businesses. Why not view our Asset Finance Leasing case studies to find out more or simply contact Thames Valley Asset Finance UK.
How long can a Sale and Leaseback loan be arranged over?
The minimum loan period is twelve months and can be as long as five years. The funding term is usually determined by the age of the asset at the point it is refinanced and its expected remaining working life/future value.
Can Sale and Leaseback be used to finance assets that are already subject of a Finance Lease or Hire Purchase loan?
Yes. A business may have assets that it acquired previously that are subject of a finance agreement that is nearing completion. These assets may have a value in excess of the current finance outstanding and the "equity" could be released back into the cash flow of the business. The new finance agreement will "settle off" the current finance, leaving a new monthly payment to be made over a revised finance term.

This type of Sale and Leaseback Finance works for assets that have a long working life and where they depreciate slowly, this includes Coaches, Construction equipment, CNC equipment, HGVs, Printing Presses and high quality manufacturing plant .
What is the minimum sum that can be raised via Sale and Leaseback Finance?
Typically 50,000, although we can look at smaller transactions on their merits. Contact Thames Valley Asset Finance UK to discuss any specific requirement you have.
Who owns the asset?
The business or "hirer" will sell the asset(s) to the finance company as a condition of the Sale and Leaseback Finance. At this point the vehicle(s) or equipment will become the property of the finance company. A number of options become available to the "hirer" at the end of the finance term contact Thames Valley Asset Finance UK to find out more.
How is the asset treated in the accounts of a business?
The asset is treated as if it has been purchased. It is capitalised in the balance sheet and depreciation is apportioned on an annual basis. The leasing payments are apportioned between a finance charge and a reduction of the outstanding debt.

The total finance charges should be allocated to the appropriate accounting periods through the primary lease term and shown as an expense in a businesses profit and loss account.
What is the tax treatment with Sale and Leaseback finance?
Where accounts have been prepared in accordance with accounting standards, the accounting treatment will be acceptable for tax purposes and no adjustments to profit need to be made

Where accounts have not been prepared in accordance with accounting standards, for tax purposes the rentals are deductible in computing profits under the accrual concept. As a result, the rentals are allocated over the period of the lease.

For further guidance on how Sale and Leaseback Finance can work for your business contact Thames Asset Valley Finance UK.
Can VAT be recovered?
VAT will be charged on the lease rentals as each payment falls due, this includes any initial deposit that may be payable under the Sale and Leaseback Finance. Any VAT paid can normally be recovered in full on a businesses subsequent VAT return *

* In the case of cars, VAT can normally only be recovered at 50%

Ready to talk about what Thames Valley Asset Finance can do for your business?

Simply contact Thames Asset Valley Finance UK and let’s talk about how we can help you make your Asset purchases with confidence. Alternatively, you can find out more about TVAF the Asset Finance Brokers and the complete range of financial facilities we offer, including everything from Chattel Mortgage to Motor Finance. Or, why not view our Asset Finance Leasing case studies, or even find the answers to your Sale and Leaseback Finance questions.

Thames Valley Asset Finance – specialists in Vehicle, Equipment and Asset Finance solutions.
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Vehicles, equipment & assets we can finance for your company
As Asset Finance Brokers, Thames Valley Asset Finance provides Vehicle, Equipment and Asset Finance solutions for UK businesses in the Commercial and Corporate sectors, including hire purchase, lease purchase, equipment finance.

© Thames Valley Asset Finance. Thames Valley Asset Finance Limited is a credit broker and not a lender. Authorised and regulated by the Financial Conduct Authority. All rights reserved.