Leaseback for sale (lease sale)

Abstract

    The lease-sale contract has emerged as a financing tool that combines the characteristics of both leasing and selling, to serve the mutual interests of both seller and buyer. The buyer benefits from the subject of the contract during a specific period without the need to pay the full price upfront, and then ownership will transfer to him after all agreed-upon installments are paid. This provides financial flexibility, allows him to take advantage of tax benefits, and protects him from the effects of inflation. Meanwhile, the seller retains ownership of the asset as security for his right to receive payment and has the right to reclaim it if the buyer defaults on his obligations, which provides him with legal and financial protection, while simultaneously increasing his sales volume and credit potential with banks. Thus, the lease-sale represents a distinctive contractual formula that combines promoting investment with protecting the rights of both parties.