COMMERCIAL PROPERTY LEASEBACK

Often businesses, especially smaller enterprises, will encounter cash flow difficulties, sometimes cash flow can be such an issue that the business fails. The key action for businesses is to properly plan their finances and to ensure effective processes to get debtors to pay on time.
However there are occasions when even with the best plans and processes there are unforeseen circumstances beyond the control of the business. A business may be very profitable but they have reached a situation where they do not have the cash flow to survive in the short term.
For businesses that own assets such as property there can be a way out, put simply this is to sell and leaseback commercial property. This works by using a company that specialises in finding investors who will take on the freehold interest and then leaseback the property at an agreed annual rent. By doing this the business releases the equity tied up in their property, which then enables them to fund the short term cash flow issues.