Plant and Equipment Sale and Leaseback

Key highlights

• Convert owned plant and equipment into usable working capital
• Well suited to construction, civil, earthmoving and industrial operators
• Deploy funds into cash flow, growth, wages, materials or tax bills
• Compare leaseback against unsecured and secured funding at once
• Check with your accountant on repayments and any tax treatment

Freeing capital from plant and equipment

Plant and equipment often represents the single largest investment on a business's balance sheet, and once paid off, that value sits locked in the yard. Plant and equipment sale and leaseback releases it: a financier buys the plant you own outright, pays you a lump sum, and leases it straight back so operations continue uninterrupted. The released cash becomes flexible working capital for whatever the business needs. This suits operators who have real equity in their plant but need liquidity more than additional machines. How much you can raise depends on the plant's market value, age, hours and condition, and on lender assessment. As with all funding, amounts and terms are indicative and subject to lender criteria, so comparing options first is wise.

Plant that lenders will consider

Lenders generally favour plant and equipment that is identifiable, well maintained and holds market value. Common examples include excavators, loaders, dozers, graders and other earthmoving plant, cranes and access equipment, concrete and materials-handling machinery, generators, and heavy workshop plant. The equipment usually needs to be owned outright, in good working order, and with useful life remaining. Very old, obsolete or highly specialised plant may attract less appetite or a lower advance, being harder to value and resell. Because financiers assess plant differently, one may offer considerably more than another against the same asset. Comparing the market helps you find the strongest structure, and approaching several lenders at once tends to reveal options a single financier would not surface alone.

How construction and civil firms use the cash

Construction and civil businesses face lumpy, project-driven cash flow: large upfront outlays for materials and mobilisation, progress claims that lag, and retentions held back until completion. The capital from a plant leaseback helps bridge those gaps. Operators commonly use it to fund materials and subcontractors ahead of progress payments, cover wages across a slow period between projects, mobilise for a new job, take on a larger contract, or settle a pressing supplier or tax obligation. Some use it to keep other facilities free for contingencies. Because the funds are unrestricted, you direct them where they deliver most value. Weigh the repayment commitment against the return you expect before deciding whether the arrangement suits your business.

Leaseback versus other funding options

Plant leaseback is one of several ways to raise working capital. 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 reach larger amounts at sharper rates. A line of credit provides flexible, draw-as-needed funding for fluctuating project needs, while invoice finance releases cash from unpaid progress claims and invoices. Leaseback specifically monetises owned plant, which can support a larger amount than an unsecured facility alone. The right choice depends on what you own, how predictable your project pipeline is, and how much flexibility you need. Comparing total cost, term and conditions across several lenders gives the clearest view, which is where seeing the whole panel at once helps.

Eligibility and assessment

To arrange a plant and equipment sale and leaseback, lenders generally want an active Australian ABN, evidence you own the plant outright, and a current valuation. Most look for a minimum trading history, often around six to twelve months, and consistent turnover that comfortably covers the repayments. Low-doc pathways may accept bank statements or BAS instead of full financials for some applicants. Your credit profile, existing commitments and the plant type all shape the offer and the advance. Because each lender applies its own criteria, the same application can produce different outcomes across the market. Everything here is indicative and subject to a full assessment, so use it to set expectations rather than treat it as a fixed outcome for your business.

Amounts, terms and speed

Across the funding we compare, indicative amounts range from around $5,000 up to $5 million, with a plant leaseback 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 can move quickly, with same-day pre-approval and funds potentially within 24 to 48 hours, though a formal valuation may add a little time. Pricing spans a wide band: 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 decide what suits your operation.

If your plant and equipment is fully paid off but your cash flow is under pressure, a sale and leaseback could unlock capital you can put straight to work. Overdrive Business Loans compares more than 80 banks and non-bank lenders on one application, so you can weigh leaseback against unsecured, secured, line-of-credit and invoice finance options and choose what fits. Simon Kendrick will walk you through the numbers and any commitment, with an obligation-free quote and only a soft credit check to start, so your score stays intact. For eligible applicants, funding may be arranged within 24 to 48 hours. Get in touch for a no-pressure chat, and check with your accountant about how any leaseback affects your tax position.