What type of financial arrangement allows businesses to utilize money tied up in real estate?

A sale and leaseback arrangement is a financial strategy where a business sells its real estate property to an investor or a financial institution and then leases it back. This arrangement allows the business to free up capital that was previously tied up in the property while still maintaining its operational use of the space. It provides liquidity and financial flexibility, allowing the business to invest the released funds in other areas such as operations, expansion, or debt reduction.

In contrast, a reverse annuity mortgage enables homeowners, usually seniors, to convert home equity into cash, but it is not specifically geared towards businesses. A shared equity mortgage involves multiple parties sharing ownership of a property and is not primarily aimed at accessing cash tied up in real estate. A traditional mortgage is a loan obtained to purchase property, but it does not offer a means to release equity in the way a sale and leaseback does. Thus, the sale and leaseback arrangement stands out as the most effective method for businesses looking to leverage funds that are immobilized in real estate.