Sale and Leaseback Finance

Key highlights

• Release cash locked in owned equipment while continuing to use it every day
• Suits established operators with unencumbered plant, machinery or vehicles
• Compare leaseback against unsecured and secured funding on one application
• Indicative funding from around $5,000 up to $5 million, subject to lender
• Speak with your accountant about how repayments and any tax effects apply

What sale and leaseback finance actually does

Sale and leaseback finance turns an owned asset into working capital. In simple terms, a financier buys equipment you already own outright, pays you an agreed lump sum, and then leases the same item back to you for regular repayments over a set term. You keep operating the asset exactly as before, while the cash you release can fund wages, stock, tax bills, a new contract or expansion. It is popular with businesses that have money tied up in machinery but need liquidity rather than more idle equipment. The amount you can release depends on the asset's value, age and condition, and on lender assessment. Figures are indicative and subject to lender criteria, so it pays to compare options before committing to any single arrangement.

Common reasons businesses raise capital this way

Owners typically look at sale and leaseback when cash is tight but the balance sheet holds valuable, paid-off equipment. Common uses of the released funds include smoothing seasonal cash flow, covering wages during a slow stretch, buying inventory ahead of a busy period, funding a fit-out, or clearing a pressing supplier or tax bill. Some operators use it to fund growth without diluting ownership or taking on a purely unsecured facility at a higher cost. Because the arrangement is tied to an asset, it can suit businesses that would struggle to raise the same amount unsecured. Whether it is the right call depends on your margins, the repayment commitment and how long you intend to keep the equipment, so consider the full picture before proceeding.

Which businesses tend to benefit

Sale and leaseback tends to suit established operators in asset-heavy trades: manufacturers, engineering and fabrication shops, transport and logistics firms, civil and earthmoving contractors, printers, and food producers. These businesses often own significant plant that has been fully paid down over years of use. If that equipment is unencumbered and still has useful working life, it may represent a sizeable pool of trapped capital. Newer or lightly capitalised businesses may find unsecured working capital or a line of credit a better fit, since they have fewer owned assets to leverage. The right product depends on what you own, how predictable your income is, and how quickly you need funds. Comparing several structures side by side helps you avoid locking into an arrangement that does not match your circumstances.

How it compares with other working-capital options

It helps to weigh sale and leaseback against the alternatives. An unsecured business loan needs no asset and can fund quickly, but is typically priced higher and capped at smaller amounts, with unsecured facilities usually up to around $500,000. A secured business loan backed by property can unlock larger sums at sharper rates. A business line of credit gives flexible, draw-as-needed access for fluctuating cash flow, while invoice finance releases cash from unpaid invoices rather than equipment. Sale and leaseback sits alongside these by monetising owned plant specifically. No single option is best for everyone; the sensible approach is to compare the total cost, term and flexibility of each against what you actually need, which is exactly where a broker who sees the whole market adds value.

Eligibility and what lenders look at

To consider sale and leaseback, lenders generally want an active Australian ABN, evidence you own the asset outright, and a view of its current market value, age and condition. Most look for a minimum trading history, often in the range of six to twelve months, and reasonable, consistent turnover. Low-doc pathways may rely on bank statements or BAS rather than full financials for some applicants. Your credit profile, existing commitments and the type of equipment all feed into the assessment and the amount offered. Every lender weighs these factors differently, which is why the same asset can attract quite different terms across the market. All figures and outcomes are indicative and subject to lender criteria and a full assessment of your business.

How much you can raise and how fast

Indicatively, business funding can range from around $5,000 up to $5 million across the products we compare, with the amount from a sale and leaseback driven by your asset's value and lender appetite. Terms commonly run from a few months to five years depending on the structure. For eligible applicants, some facilities offer same-day pre-approval, with funds potentially available within 24 to 48 hours, though asset-backed arrangements can take a little longer where a valuation is required. Because pricing and speed vary widely, comparing lenders matters. Rates across business lending start from around 7.49% p.a. for stronger secured facilities, with unsecured and short-term products priced higher depending on turnover, term, security and credit profile. All pricing is indicative and subject to assessment.

If you have equipment working hard for your business but cash is tight, it is worth seeing what a sale and leaseback could release for you. Overdrive Business Loans compares more than 80 banks and non-bank lenders on one application, so you can line up leaseback against unsecured, secured and line-of-credit options and pick what fits. Simon Kendrick can talk you through the numbers and any repayment commitment, with an obligation-free quote and only a soft credit check to start, so your score is not affected. For eligible applicants, funding may be arranged within 24 to 48 hours. Reach out for a no-pressure conversation, and check with your accountant on how any arrangement would affect your tax position.