November 17, 2022 2:38 pm

What Are the Benefits of Sale Leaseback?

There are many advantages for an organization to explore sale leaseback options for their railcars. Mitsui Rail Capital Chief Financial Officier George Abraham explains some of the most common questions people have about sale leaseback.

WHY DOES SALE LEASEBACK MAKE FINANCIAL SENSE?

The economic benefits of railcar ownership can vary from time-to-time depending on both internal and external factors.

Right now, with interest rates and debt skyrocketing, businesses will be scouring business sheets for ideas on how to free up cash. Selling railcars, while leasing them back, is a win for your organization in that it’s cash injection to pay for business needs or pay down debt while still leveraging railcars for operational needs.

WHAT ARE SOME DOWNSIDES OF RAILCAR OWNERSHIP COMPARED TO LEASING?

Railcars are long-life assets. Ownership of a railcar locks you into costly functions such as overall management, storage, maintenance and staying up to date on regulatory repairs for decades.

On the flipside, you can lock in a railcar lease for as short or long as you need based on overall business conditions.

HOW DO I KNOW WHETHER TO OWN OR LEASE?

Finally, and likely biggest decision-making criteria regarding to own vs. lease is the need for your business. With MRC as your business partner, our mission, vision and values are centered on helping railcar owners and lessees solve business problems.

MRC has allocated capital to invest and can provide a variety of leasing solutions to meet your needs. We look forward to working with you to evaluate your railcars. MRC can be a great partner and we look forward to discussing options with you.