How an Equipment Lease Can Affect the Sale of Your Business

Written by: Ralana D. Shelley, CBI
Business Broker & Dir. of Marketing, SIBR
June 10, 2011

As any business broker will tell you, equipment issues that arise at closing can be sticky. It is best to be prepared ahead of time, and know how to handle your particular issues. Of course, equipment varies from business to business. A bar / restaurant may lease coolers, ice makers, etc. and be concered with obsolete equipment due to age and maintenance needs. Whereas, a printer may lease copiers and be more concerned with obsolescence due to technology. But, overall, the following are scenarios that can apply in most situations.

• Old or obsolete equipment under lease will most likely not be assumed by purchaser.


• If a lease is assumed, remember that if not handled correctly, it may decrease the overall purchase price you get at closing.


• Capital leases have a negative impact on the cash flow - and therefore a negative impact on the purchase price at closing.

To find out the specifics on each point above... click here to read the full article.

As is the case with most things, an ounce of prevention equals a pound of cure. If you prepare ahead of time, you may be able to avoid equipment issues at closing.