Can I Borrow Against Equipment I Own?

Key highlights

• Owning equipment outright can let you raise working capital against it
• You typically keep using the equipment throughout the arrangement
• Funds can support cash flow, growth, wages, stock or tax bills
• Compare asset-backed options with unsecured funding on one application
• Ask your accountant how repayments and any tax effects apply

The short answer

If your business owns equipment outright, you can often borrow against it to raise working capital. The most common route is a sale and leaseback, where a financier buys the equipment, pays you a lump sum, and leases it back so you keep using it. Some lenders also offer asset-backed facilities that lend against equipment while you retain ownership, depending on the arrangement. Either way, the equipment provides security that can support funding you might not access unsecured. How much you can raise depends on the equipment's value, age and condition, and on lender assessment. As always, the amount and terms are indicative and subject to lender criteria, so it pays to compare before deciding on any single approach.

How borrowing against equipment works

The mechanics are straightforward. A lender assesses the equipment's current market value, age and condition, then determines how much it will advance against it. Under a sale and leaseback, ownership transfers to the financier and you lease the item back for regular repayments over a set term, continuing to use it throughout. Under other asset-backed structures, you may keep ownership while the lender holds security over the equipment. The equipment effectively underpins the funding, which can mean access to a larger amount or a different structure than an unsecured loan alone. Because approaches and terms vary between lenders, comparing several offers helps you understand the true cost and choose the arrangement that best fits your cash flow and plans.

What equipment can support funding

A wide range of business equipment can potentially support funding, provided it is owned outright, in sound condition and retains market value. Common examples include manufacturing and processing machinery, workshop and CNC equipment, earthmoving and civil plant, trucks and trailers, utes and vans, and specialist trade gear. Lenders generally prefer identifiable, serviceable items with useful working life remaining. Very old, obsolete or highly specialised equipment may attract less appetite or a lower advance. Because financiers value equipment differently, one may offer more than another against the same asset. That variation is why comparing the market matters, and why approaching many lenders at once tends to reveal stronger options than dealing with a single financier in isolation.

Reasons businesses do this

Businesses borrow against owned equipment when they have real value in their assets but need liquidity rather than more equipment. Common uses of the funds include smoothing seasonal cash flow, covering wages during a lean period, buying stock or materials ahead of demand, funding a fit-out or expansion, taking on a larger contract, or settling a pressing supplier or tax bill. Because the released cash is unrestricted working capital, you decide where it does the most good. It can also preserve other facilities, such as an overdraft, for genuine emergencies. Whether it suits you depends on the repayment commitment against the benefit you expect, so it is worth modelling the numbers before committing your business to an arrangement.

Eligibility and what lenders check

To borrow against equipment, lenders generally want an active Australian ABN, proof you own the equipment outright, and a current valuation. Most look for a minimum trading history, often around six to twelve months, and turnover that comfortably supports the repayments. Low-doc options may accept bank statements or BAS instead of full financials for some applicants, and newer businesses can sometimes still qualify subject to criteria. Your credit profile, existing commitments and the equipment type all influence the offer. Because each lender applies its own rules, outcomes vary across the market for the same application. Everything here is indicative and subject to a full assessment, so use it to frame expectations rather than treat it as a guarantee for your business.

How much and how fast

Across the funding we compare, indicative amounts range from around $5,000 up to $5 million, with an equipment-backed advance driven by the asset's value and lender appetite. Terms commonly run from a few months to five years. For eligible applicants, some facilities move quickly, with same-day pre-approval and funds potentially within 24 to 48 hours, though a formal valuation can add a little time. Pricing varies: rates start from around 7.49% p.a. for stronger secured facilities, with unsecured and short-term products higher depending on turnover, term, security and profile. All figures are indicative and subject to lender criteria and assessment, so compare carefully before you commit to any arrangement.

So yes, you can usually borrow against equipment you own, and the sensible next step is to see what it might support. Overdrive Business Loans compares more than 80 banks and non-bank lenders on one application, so you can weigh asset-backed options against unsecured, secured and line-of-credit funding and choose what fits. Simon Kendrick will explain the numbers and any commitment in plain terms, with an obligation-free quote and only a soft credit check to start, so your score is unaffected. For eligible applicants, funding may be arranged within 24 to 48 hours. Reach out for a relaxed conversation, and check with your accountant about how any arrangement would sit within your tax position.