how does off balance sheet financing work 
off balance sheet financing is an accounting strategy that companies use to move certain assets liabilities or transactions away from their balance sheets they may do this to attract more investors or when they have a lot of debt but need to borrow more capital to fund their operations companies with higher debt do this to get better financing rates they may move these transactions to other entities like a subsidiary or a special purpose vehicle with its own balance sheet or to a partner in a joint venture these transactions appear on other financial records although it sounds illegal it isn t as long as companies are transparent and follow accounting standards 1