Why choose a sale-leaseback for clean energy projects?

The most tax-efficient solution for your energy project finance investments

Robert Davies, Senior Vice President, Key Equipment Finance Clean Energy , October 2024

<p>Why choose a sale-leaseback for clean energy projects?</p>

For multimillion-dollar endeavors, optimizing tax benefits is complicated and processing can be cumbersome. A Key sale-leaseback structure can be a powerful sales tool when you offer qualified clients access to all the resources they need under one roof. Working together, we can help you leverage this unique sales tool to close more deals with less effort. Here’s how.

Sale-leaseback 101

Simply put, a sale-leaseback structure enables us, the financier, to take ownership of the equipment and lease it back to the client. This gives commercial developers immediate cash flow to fuel their projects, with the option to own the assets outright at the end of the lease term. Most important, our sale-leasebacks help your clients monetize everything — from debt and equipment ownership to potential tax and depreciation benefits — regardless of their tax appetite.
 

Single-source convenience

Our dedicated Clean Energy team understands the intricate dance of multi-stakeholder contracts, assets, tax credits, and business interests. With decades of structuring and clean energy asset experience, we can help you help your clients:

  • Leverage our collective resources to maximize their project's value
  • Enjoy seamless transactions and proven equipment financing expertise
  • Access broad, tenured industry relationships
  • Experience the exceptional, ongoing client communication and service that are hallmarks of the Key brand


Competitive closing features

In addition to offering comprehensive resources under one roof, Key sale-leaseback structures have other advantages that deliver end-to-end transaction benefits. 

No recourse 

Unlike other financing providers, Key’s sale-leaseback structures may not require personal or parent collateralization, making it easier to offer a quick, complete funding source for your client’s project. The ideal candidate for a sale-leaseback structure will have a strong balance sheet and extensive experience in this space. 

Unique early buyout option

Unlike with most competitors, our sale-leaseback product offers a unique early buyout option with guaranteed, predictable pricing. When the lessee is ready to regain ownership, they can do so without the uncertainty typically associated with fair market value terms, reducing repurchase risk.

Custom flexibility

Our client-focused approach is just that. With transaction sizes starting at $2 million and lease terms up to 15 years, our structures cover a broad range of assets, including: 

  • Solar PV and solar thermal
  • Storage solutions
  • Fuel cells
  • Electric vehicles (buses, fleet vehicles, etc.)
  • Heat and power systems 
  • Microgrid systems


Tried-and-true collaboration

An early introduction to sale-leaseback opportunities is all we need to create a potentially lucrative sale-leaseback structure. We first listen to understand your client’s goals, business objectives and stakeholder requirements. We then coordinate Key’s resident credit, underwriting and accounting professionals to tailor a compelling, strategic funding solution with streamlined processing. By leveraging our team’s deep relationships with other clean energy experts, we can help broaden your scope and build stronger, long-term relationships. 
 

Offer your clients more than ‘just’ capital

A sale-leaseback structure from Key is more than a transactional solution — it’s a transformation of resources. When we work together and operate as one unified financial source, we open doors to possibilities for everyone involved. Contact us today to sell more, more profitably.
 

Learn more


Visit key.com/cleanenergy for more information. 

Key Equipment Finance is a division of KeyBank National Association. All credit, loan, leasing products are subject to collateral and/or credit approval terms, conditions, and availability and subject to change.

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