Sale leaseback

Sale leaseback – in the area of commercial law this term refers to a type of sale of item or product, where the seller transfers the ownership to the buyer, but keeps the possession of the sale for themselves for some period, so he/she can still use it (for free or against lease sum payable towards the buyer). In practice sale leasebacks are used in situations where the buyer wants to purchase the item on attractive price, but does no intend to use it very often. On the other hand, the seller receives fresh cash and still can use the item for the agreed period after the sale is done. The difference between sale leaseback and sale on credit is that in the last, the buyer does not pay immediately the sale price on receipt of title, but it has been agreed that the price will be paid later (usually via monthly installments for concrete agreed period).

Posted in: S