Chelsea Mandel and Ascension Advisory are introducing the sales leaseback strategy to small businesses in the $17 billion per year market. This complicated technique primarily used by private equity theorists helps businesses access incumbent capital. With the expertise of Chelsea Mandel and Ascension Advisory, this strategy has proven beneficial for improving business cash flow and financial standing.
The U.S. Small Business Administration acknowledges the importance of small businesses during National Small Business Week, noting their contribution of 40% to the annual national GDP. Despite the desire of many Americans to own a business, funding is often an obstacle. Various financing options help overcome this hurdle, including bank loans, investors, grants, and crowdfunding platforms. In addition, developmental resources and mentorship programs offer guidance for new entrepreneurs. With the rise of technology, starting and managing small businesses has become more accessible, but the challenges remain substantial.
Mandel uses her social media following, over 27,000 on LinkedIn, and Ascension resources including podcasts and email courses, to educate people about sales leasebacks.
Implementing sales leaseback strategy for business growth
These transactions, typically seen in institutional investment circles, allow companies to sell assets and then rent them back. These transactions can free up capital, reduce asset management burden, and maintain operational activities, along with possible tax benefits.
Prospective buyers can acquire a business and its property using a sale leaseback, according to Mandel. The property is sold to an investor who profits from the rent paid by the buyer. This process turns the buyer into a tenant and the investor into a landlord. This method can provide financial relief to cash-strapped businesses or help new owners lower initial costs. The investor, in turn, benefits from a steady stream of rental income.
Brian Dennis from Dennis & Co. successfully applied a sales leaseback strategy taught by Ascension Advisory. This allowed him to secure a new location for his business with no personal financial expenditure. Although not commonly used among small businesses, sales leasebacks are popular among commercial real estate companies and private equity firms, signifying room for growth in this field.
