Items the business owns and will use repeatedly for longer than a year in its main operations, such as vehicles and machinery
Is sale of assets short or long-term finance?
Long-term finance
By a firm selling assets it may be accessing a major or only source of capital available but it will no longer be able to use them.
Firms may be able to sell assets they are no longer using such as factories or stores.
What is sale and leaseback?
If the firm wishes to continue using the asset but want to free up finance they could agree to sell the asset then lease it back from its new owner for an agreed period of time
What is the main disadvantages of sale and leaseback?
This option may be expensive in the long-term with regular rent payments required, a loss of control of the asset and possibly not being able to retain the asset after the lease agreement is over
