Using sale-and-leaseback to unlock working capital without increasing liabilities

In a world where businesses are constantly looking to improve liquidity, reduce debt burdens, and maintain financial flexibility, the Sale-and-Leaseback (SALB) model has emerged as a powerful and underutilized financial tool. This strategy allows businesses to unlock the value of assets they already own—without increasing liabilities on their balance sheet. For CFOs and promoters of capital-intensive and high-growth businesses, this structure offers a clean, efficient way to optimize working capital while retaining full operational control over their core assets.

A Sale-and-Leaseback is a financial arrangement where a company sells an existing asset (like machinery, equipment, furniture, or even IT infrastructure) to a leasing partner, and simultaneously leases it back for continued use.

Crucially, this model does not create a traditional loan or increase your debt—because lease obligations are treated differently under certain accounting standards like IGAAP.

Convert fixed assets on your balance sheet into cash—instantly. Useful for reinvestment in growth, operations, or debt reduction.

Structured as operating leases under IGAAP, lease liabilities are not recorded on the balance sheet—improving Debt-to-Equity and TOL/TNW ratios.

Reduction in liabilities and increase in cash improves ROA, ROCE, and Current Ratios—key metrics for lender and investor confidence.

Entire lease rentals are 100% tax-deductible, leading to better tax savings than interest deductions on loans.

Stronger ratios and liquidity lead to better credit ratings, enabling access to cheaper capital and bond markets.

Recently, Capexo helped a customer in the packaging industry unlock INR 2.5 Cr from their existing fixed assets through a 12-month leaseback model. Though the cash was placed in an FD lien, the company saved nearly INR 45 Lakhs in taxes over the lease term—creating real working capital efficiency without increasing debt.

At Capexo, we specialize in designing leaseback solutions that are:

We work with companies of all sizes and industries, helping them leverage their existing assets to fuel their future.

Sale-and-Leaseback is not just a tactical move—it’s a strategic transformation in how companies think about capital, ownership, and financial agility. If your company is sitting on depreciated assets and looking for growth capital, it’s time to ask:

Why borrow when you can unlock your own capital and pay less tax doing it? Let leasing work for your balance sheet.