What is Sale and Leaseback?
Nexa Consultancy | Startup & Finance Glossary
A Sale and Leaseback is a financial transaction in which a company sells an asset it owns (like an office building or equipment) and then immediately leases it back from the new owner. This allows the company to convert a fixed asset into cash while still being able to use it.
For Startups: While less common for early-stage tech startups, this can be a financing strategy for more mature, asset-heavy startups (e.g., manufacturing or logistics) that need to unlock capital for growth without taking on traditional debt or diluting equity.
Example: A D2C startup owns its warehouse valued at ₹2 Crores. It sells the warehouse to a real estate investor and then signs a long-term lease to continue using it. The startup receives ₹2 Crores in cash, which it can use to fund its expansion.