BE THE BEST IDEA
WHY WOULD YOU SELL YOUR COMPANY, WHEN YOU CAN CONTINUE TO OWN IT, AND LEASE IT FOR LONG-TERM INCOME WITH A RISK-FREE, GUARANTEED MONTHLY PAYMENT FOR 4, 7 OR TEN YEARS OR MORE (RENEWABLE) AND AVOID CAPITAL GAINS TAX?
Hands off. Hassle Free. Everyone wins. No banks. Owner goes to Tahiti with a worry-free comfort level while the company continues to grow in revenue and in value in the owner’s absence.
New lease is renegotiated based on business growth.
Now, Isn’t that really why you got into business in the first place?
Here’s a dozen good reasons why you might consider leasing out your business:
- You are suffering from “burn out” and just want a sabbatical. An extended getaway is a perfectly legitimate reason to lease.
- You might be in the middle of managing health issues, family situations, or personal matters, and the business is too much to handle at the moment. Maybe you will want to come back to your business at a later time.
- You might be giving retirement a “dry run” to see if it will work in the way you are viewing it.
- Perhaps your tax picture will be more favorable by leasing instead of selling.
- You might be “eyeing up” or grooming someone to take over at a later point.
- You want to take advantage of bigger long-term financial benefits from leasing than selling.
- Upon the death of an owner, the family wishes to keep the business going while they transition to new ownership.
- You need to temporarily re-direct your attention from one business to start up another.
- Your plans to go back to school are now a reality
- You are in the planning stages of selling the business and want to build the business value without day-to day involvement
- You are creating a portfolio of businesses to lease.
- You enjoy golf more than running a business
The company remains the property of the owner to sell later, or the owner may sell the company now on a lease-to-buy arrangement.
The owner determines the lease period and avoids or significantly reduces capital gains tax (30% or so). The Lessee is able to earn a significant ongoing income beginning on day one for an affordable deposit, while the company continues to grow in the owner’s absence.
The owner’s payments are bonded and fully guaranteed. Leases can last 4 years, 7, years or 10 years and are renewable. The owner determines the lease period and the terms.
Kanketa Global Systems collects the payments for the owner and co-manages the company.
These are just a few of a host of good reasons why leasing is an excellent option. Whether you are a Lessee or Lessor, all rules apply.
Leasing a business works much like any property lease. There are prerequisites. Like an apartment rental, you must have a company in good, leasable condition. The company must have a minimum Debt-to-Income of 1.50. The company must have evidence of a three-year track record for consistently producing a profit. A specific profit level isn’t required for a lease, but the higher the profit, the higher the monthly lease amount.
If you have been challenged by back taxes, legal issues, bankruptcies, etc. we can help. The Kanketa Global team of Subject Matter Experts has significant resources to clean up any situations that might hold you back.
The Kanketa Management team is in place to ensure that the lease holds its value. Every business owner and startup should know about business leasing options.
Kanketa Global Systems, and its subsidiaries are not business brokers. We do not derive income from buying, or selling businesses. Our fees are earned for the management and business profit performance increase of the companies we serve.