Companies use leasebacks when they need to utilize the cash they invested in an asset for other purposes but they still need the asset itself to operate their business. ... With a leaseback, a company does not increase its debt load but rather gains access to needed capital through the sale of assets.

What is the purpose of a leaseback?

In real estate, a leaseback allows the owner-occupant of a property to sell it to an investor-landlord while continuing to occupy the property. The seller then becomes a lessee of the property while the purchaser becomes the lessor.

Is leaseback a good idea?

More and more retirees are taking advantage of the leaseback option. It gives them the ability to continue living in the home they owned while having more money for retirement. And of course, it is good option for people who have suffered financial reverses due to job loss or other difficult circumstances.