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Sfm query
how does lessee raise finance through sale and lease back transaction for working capital and others. (pg. 3.3, chapter 3, sfm module, ca final)
Replies (1)
Lessee will identify a lessor with whom lessee will enter into a contract of leasing.
First lessee sale identified assets to lessor on cash terms and realise cash...
this cash can be utilized for meeting working capital requirements...
inturn after selling identified asset lessor prepare term sheet and rental schedule for same assets which is leased to lessee for use in business..
Now lessee will pay lease rental and agreed interval and will take tax advantage on lease rental, and lessor will avail tax advantage of depreciation on cost of asset to lessor
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