An equipment sale leaseback, often called an equipment sale and leaseback, is a financial transaction and contract. An equipment company sells equipment that it currently owns to an investor (lessor). And immediately leases (rents) the equipment or machinery back for the contract duration . The equipment rental company (lessee) continues to use the equipment and machinery without interruption, but no longer owns it.
One of the quickest methods for a company to raise working capital is by completing equipment sale and leaseback financing on the equipment and machinery it currently owns. It is also a very interesting option to easily grow your own equipment rental fleet. without having to make major investments up front.
Equipment sale and leaseback is currently becoming an intriguing financial model in the equipment rental industry
However, in addition to making the arrangements with the financial companies, you also need to register and maintain these contracts in your ERP solution. Below you see some screenshots of how you create leaseback contracts, maintain, and invoice within DynaRent for Dynamics 365 for Finance and Operations.
Image 1: An example of a leaseback contract in DynaRent
On the specific leaseback contract, you can store all the important information that you would expect in a leaseback arrangement:
- Equipment information
- Terms, down payments, and contract amounts
- Term details and status
Besides having the complete sale and leaseback covered within DynaRent for Dynamics 365 for Finance and Operations. You also have a direct link to your equipment itself that is used in the daily rental operations. In addition, at the end of the leaseback contract, the equipment automatically becomes a fixed financial asset in your equipment company.
Image 2: The leased equipment is fully available in your rental fleet
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