Release the cash sitting in equipment you already own.

A sale and leaseback releases cash from equipment your business already owns outright. A financier buys the asset from you at an agreed value, pays you the cash, and leases or finances it straight back so you keep using it without interruption. You then make regular repayments over a term, typically one to five years, and at the end you own the asset again or clear a residual. It turns idle equity in trucks, machinery or plant into working capital for a contract, growth or a tax liability.

Equipment that is owned outright or nearly paid off, has a clear resale market and a reasonable remaining life: trucks and trailers, excavators and earthmoving plant, manufacturing machinery, bottling and production lines, agricultural machinery, medical equipment and fleets of vehicles. Lenders check the PPSR to confirm there is no finance owing and value the asset. Very old, specialised or low-value equipment is harder to fund because the lender relies on the asset’s resale value.

Selling the asset to the financier is a disposal for tax purposes, which can trigger GST on the sale price and a balancing adjustment if the sale price differs from the asset’s written-down value. The lease or finance payments that follow are generally deductible, and GST on them can be claimed. The net effect depends on how the asset has been depreciated, so the arrangement should be reviewed with your accountant before you proceed; your broker provides the figures they need.

Usually, yes. Because the financier holds security over the equipment, sale and leaseback is priced like asset finance rather than unsecured lending, which can be materially cheaper for a business that would otherwise be quoted unsecured rates. It also allows longer terms, so the repayment is lower. The costs to weigh against that are the valuation, the establishment fee and any tax consequences of the sale.

Yes, both are common uses. Because the funds are unrestricted working capital, businesses use them to clear a tax debt, fund the mobilisation costs of a new contract, buy stock, or consolidate more expensive short-term debt. Lenders will ask what the funds are for and may want to see that the business is trading profitably.

Three to ten business days, mostly for the valuation and the PPSR and ownership checks. Once the valuation is agreed, documents are signed, the financier pays the agreed amount to your account and the repayments begin. If the funds are for a deadline such as a tax payment or contract start, tell your broker and the valuation is booked immediately.

Yes, that is a sale and leaseback. You sell an unencumbered asset to a financier and lease or finance it back, receiving the sale proceeds as working capital while keeping the asset in use. Lenders will want proof you own it outright, a valuation, and evidence the funds are for a legitimate business purpose. It is a useful option when capital is tied up in plant, but it converts an owned asset into a monthly commitment, so the cash flow effect needs checking first.

Yes. Unencumbered machinery can be refinanced through a sale-and-leaseback or a loan secured on the equipment, releasing a proportion of its value as working capital while you keep using it. Lenders value the machine and lend against it, typically 50 to 80 per cent of value depending on age and type. It is a useful way to fund growth without selling the gear that earns the income.

Sometimes. Equipment bought in the last few months can often be refinanced with a sale-and-leaseback, releasing the cash back into the business. Fixed works already paid for are harder to refinance because there is no asset to secure, though a business loan can be considered for an established business. It is usually cheaper to arrange the finance before paying, so speak to your broker before the build starts.

Typically 50 to 80 per cent of the asset’s valued amount, depending on its type, age and how readily it could be resold. Newer trucks and yellow goods sit at the higher end; older or more specialised machinery at the lower end. The lender arranges an independent valuation, and the amount is agreed before you commit. Several assets can be bundled into one arrangement to release a larger sum.