Equipment Sale and Leaseback

Key highlights

• Turn owned equipment into working capital without losing its use
• Well suited to workshops, manufacturers, trades and production businesses
• Fund cash flow, growth, wages, stock or a pressing tax bill
• Compare leaseback against unsecured and secured funding at once
• Check with your accountant on repayments and any tax treatment

Releasing value from owned equipment

Equipment sale and leaseback focuses on the machinery and gear your business has already paid for. Rather than let that value sit idle on the balance sheet, you sell the equipment to a financier for an agreed lump sum, then lease it back and keep using it exactly as before. The cash you release becomes flexible working capital. This appeals to businesses with genuine equity in their tools and plant but a need for liquidity rather than more equipment. How much you can raise depends on the equipment's market value, age and condition, and on the lender's assessment. As with all lending, the amounts and terms are indicative and subject to lender criteria, so comparing options before committing is worthwhile.

Types of equipment that suit leaseback

A wide range of equipment can potentially support a leaseback, provided it is owned outright, in sound condition and retains market value. Common examples include manufacturing and processing machinery, CNC and workshop equipment, packaging and production lines, commercial kitchen and food-processing gear, printing presses, and specialist trade equipment. Lenders generally prefer identifiable, serviceable items with useful working life remaining. Very old, obsolete or highly bespoke equipment may attract less appetite or a lower advance. Because financiers value equipment differently, one may offer more against your gear than another. That variation is exactly why comparing the market matters, and why approaching many lenders at once tends to surface stronger options than dealing with a single financier in isolation.

What the released funds commonly support

The cash unlocked through an equipment leaseback is unrestricted, so you deploy it where it counts. Businesses frequently use it to smooth cash flow between jobs, cover wages during a quieter period, buy raw materials or stock ahead of demand, fund a workshop expansion or fit-out, take on a bigger contract, or settle a pressing supplier or tax obligation. Because you decide how the money is used, the arrangement flexes to your priorities. This makes it attractive to owners who have invested heavily in equipment but need working capital now. Whether it is the right move depends on the repayment commitment against the value you expect to gain, so it pays to model the numbers before signing anything.

Comparing leaseback with other funding

Equipment leaseback is one of several ways to raise working capital, and it suits some situations better than others. An unsecured business loan needs no asset and funds quickly, but is usually capped around $500,000 and priced higher. A secured loan against property can access larger amounts at keener rates. A line of credit provides flexible, draw-as-needed funding for fluctuating needs, while invoice finance releases cash from unpaid invoices. Leaseback specifically monetises owned equipment. The best fit depends on what you own, how steady your income is, and how much flexibility you want. Comparing total cost, term and conditions across several lenders gives the clearest view, which is where seeing the whole panel on one application genuinely helps your decision.

Eligibility and lender considerations

Lenders assessing an equipment sale and leaseback 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 proposed repayments. Low-doc options may rely on bank statements or BAS rather than full financials for some applicants, and newer businesses can sometimes still qualify subject to criteria. Your credit profile, existing debts 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 set expectations rather than treat it as guaranteed.

Amounts, terms and speed

Across the funding we compare, indicative amounts run from around $5,000 up to $5 million, with an equipment leaseback advance driven by your gear's value and lender appetite. Terms commonly sit between a few months and 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 time. Pricing varies widely: 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 deciding what works for your business.

If your business has value locked in equipment but needs working capital, an equipment sale and leaseback could be worth exploring. Overdrive Business Loans compares more than 80 banks and non-bank lenders on one application, so you can weigh leaseback 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 begin, so your score is not affected. For eligible applicants, funding may be arranged within 24 to 48 hours. Reach out for a relaxed conversation, and check with your accountant on how any leaseback would sit within your tax position.