BANGI WILL HELP BUILD LONG-TERM TENANT RELATIONSHIPS THROUGH
Among the various ways to raise capital for growing cannabis companies is a method referred to
as sale leaseback financing. It is one of the primary means that BANGI offers its tenants so they
may avoid incurring large debts or employing private equity. Whatever your specific situation
may be, we can assure you that the real estate and financing executives on our team have more
than 50 years of business development experience to help you employ this financing method
The Sale Leaseback Financing Method
As the name easily suggests, this method involves one business selling one of its assets to
another entity and then immediately leasing it back. Thus the seller no longer owns the asset but
is still able to use it. Real estate and equipment are the types of assets that are commonly sold
and the lease is usually a long-term arrangement. The conditions and rental rate may depend on
the seller’s credit history, buyer’s financing costs, and projected rate of return.
Sale Leaseback Financing Advantages
Since the seller can continue to use the property or equipment it just sold, there would be no
interruptions or delays in productivity. If all other factors remain constant, revenue before and
after the sale should be the same.
The additional capital sale leaseback financing generates comes from the cash investment of the
buyer/new owner of the asset. The seller now has extra monetary resources to pursue other
business goals from paying down debts to purchasing more equipment and expanding operations.
Another benefit that the seller receives is tax savings. Leasing the property or equipment back
essentially turns them from assets to contingent liabilities. The monthly rent in fact is completely
tax deductible as a business expense. These savings can then also be pooled to become extra
Sale leaseback financing also has advantages for the buyer. By leasing back the asset, it secured
a fair return of its investment and guaranteed a long-term income stream.
This type of asset-based lending method practically functions as a loan but the rent isn’t so much
a debt payment as an operational cost. Also, unlike typical bank loans, sale leaseback financing
does not require additional collateral other than the property or equipment being sold. Once all
the payments are made the seller regains ownership of the asset.
We encourage you to contact our financing team to initiate a dialogue to determine how BANGI
can support your expansion efforts through our innovative and unique sale-leaseback financing
vehicles tailored specifically towards the booming cannabis industry.