A leaseback agreement is an arrangement in which the company that sells an asset can lease back that same asset from the purchaser. A lease back agreement is also known as a sale-leaseback. With a leaseback agreement the details of the arrangement, such as the lease payments and lease period, are made immediately after the sale of the asset. In a leaseback transaction, the seller of the asset becomes the lessee, and the purchaser becomes the lessor.
The most common users of leaseback agreements are builders or companies with high cost properties. Leasebacks are common in the building and transportation businesses, and real estate. For example: property, land, or large equipment. A leaseback agreement for your automobile can be a way for a business to release assets by selling its vehicles and leasing them back, or for an individual to lease their car back to their company. This can work well for an LLC or partnership where income is subject to self-employment.
Have questions about insurance coverage for a leaseback asset? Your Friends In The Insurance Business at Midland's Ieuter Insurance Group can answer your insurance coverage questions.
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