A leaseback is an arrangement in which the company that sells an asset can lease back that same asset from the purchaser. The details of the arrangement, such as the lease payments and lease duration, are made immediately after the sale of the asset. In a Sale-Leaseback transaction, the seller of the asset becomes the lessee and the purchaser becomes the lessor.

In Sale-Leaseback agreements, an asset that is previously owned by the seller is sold to someone else and then leased back to the first owner for a set period of time. In this way, a business owner can continue to use a vital  asset but ceases to own it.

A leaseback transaction can also help improve a company's balance sheet health. The liability on the balance sheet will go down by avoiding more debt, and current assets will show an increase in the form of cash and the lease agreement. Although equity does not need to be paid back, shareholders have a claim on a company's earnings based on their portion of its stock.