Re-servicing debt for Sale Leaseback

[Ryan Beasley]

Hi,

I’m looking in to Sale Leasebacks for credit tenants and I wondering how the lending institution handles the Seller-tenants owner occupied loan for the building & business?

Is the equity dispersed to the owner calculated as a debt/equity %?

Example: An owner owes a bank 2 million on their business and property with $500k in equity. An investor pays the owner 1.5 million for the real estate. How does the lender determine what % of that goes towards satisfying debt and paying the seller their due equity?

I’m assuming it is based off Debt to Equity %. Since the seller has 20% equity then they keep 20% of the 1.5 million paid by the buyer?