Property & Equipment Lease Debt

Are Lease Liabilities Debt?

Yes, lease liabilities are considered a form of debt, a contractual obligation to make lease payments over the lease term. These obligations are recorded as lease liabilities on the company’s balance sheet, representing the future cash outflows associated with the lease.

Succesful resolution of property debt and equipment lease obligations requires a tailored approach. Unlike traditional forms of debt, property and equipment lease debts pose unique challenges due to the absence of ownership interest held by the lessee. At Rise Alliance, we specialize in devising strategic solutions that address these complexities head-on, ensuring favorable outcomes for both parties involved.

The cornerstone of our approach lies in leveraging reality to achieve mutually beneficial agreements. We understand that lessors are motivated to avoid vacancies, whether it’s an empty space or unused equipment. Our strategy centers on providing realistic and sustainable options that allow lessors to resume income streams while accommodating the financial capabilities of lessees.

For instance, when faced with defaulted property leases, lessors are confronted with limited options. They can either pursue insolvent businesses, enduring vacancies until the property is re-rented, or adjust rent terms to align with market conditions and the lessee’s affordability. By opting for the latter, both parties stand to benefit from a win-win scenario, with landlords able to resume rent collection and lessees provided with a viable path forward.

Similarly, with leased equipment, repossession often proves impractical and resource-intensive for lessors. Liquidating leased equipment is fraught with challenges, including lengthy processes and unpredictable returns. At Rise Alliance, we employ forced liquidation valuations to assess lessors’ financial positions and offer alternatives that circumvent the cumbersome liquidation process, ensuring optimal returns on assets.

In the face of loss, failure, and default, maximizing returns and minimizing damage is paramount. Whether you’re a business owner, real estate proprietor, or equipment manufacturer, our expertise can help you navigate these challenges effectively and efficiently. Trust Rise Alliance to guide you through these complex circumstances with practical solutions tailored to your specific needs.