Equipment Sale-Leaseback: Cash Out Your Equipment (2026)

2026-04-29

Turn owned equipment into working capital in as little as 7 days. Real 2026 sale-leaseback rates, terms, who qualifies, tax impact, and the paperwork lenders ask for.

Most business owners don''t realize the equipment in their yard is sitting on six or seven figures of trapped cash. A paid-off excavator, a fleet of trucks, a CNC machine — anything you own free and clear can be turned into working capital in 5-10 business days through a financing structure called equipment sale-leaseback, sometimes marketed as a cash out program.

This guide walks through exactly how it works, who qualifies, what it costs, and — for brokers — why it''s the single highest-commission deal in equipment finance.

What Is an Equipment Sale-Leaseback?

A sale-leaseback is a two-part transaction:

1. Sale: A funding partner buys your equipment at appraised value and wires you the cash.
2. Leaseback: You simultaneously sign a 24–60 month lease and keep using the equipment without interruption.

At the end of the term, you buy the equipment back for $1, 10% of original cost, or fair market value (your choice up front). The equipment never leaves your jobsite. Your operations don''t change. The only thing that changes is your bank balance.

Why Business Owners Choose Sale-Leaseback Over a Bank Loan

• It doesn''t touch your bank line of credit. Crucial if you''re planning future bank borrowing.
• Approval is driven by equipment value, not just credit score.
• No real estate collateral required.
• Fixed monthly payment. No balloon. No rate reset.
• Closes in days, not weeks.

Who Qualifies?

Ideal candidates have:

• Equipment owned free and clear (or with a small payable lien)
• Appraised equipment value of $50K–$5M+
• Equipment 1–7 years old, well-maintained, with documented service history
• Business operating 2+ years with $250K+ annual revenue
• Owner personal credit 600+ FICO (650+ ideal)

Construction equipment, commercial trucks, manufacturing machinery, and titled rolling stock are the easiest categories to fund.

What It Costs

Sale-leasebacks typically price at an implied APR of 12–22% — higher than a traditional equipment loan, but dramatically cheaper than the alternatives most cash-strapped operators use:

• Merchant cash advances (often 50%+ effective APR)
• High-interest business credit cards
• Short-term factoring

You''ll typically receive 70–100% of appraised value in cash, with monthly payments fixed for 24–60 months.

The 6 Most Common Uses for Cash-Out Funds

1. Fund expansion — open a new location, add a crew, enter a new market
2. Bridge slow receivables — cover payroll while waiting on customer payments
3. Acquire a competitor — use equipment equity as the down payment
4. Consolidate expensive debt — pay off MCAs and high-rate cards into one fixed payment
5. Tax strategy — restructure depreciation while freeing cash before year-end
6. Buy more equipment — use cash from one paid-off machine as down payment on three more

How the Process Works (Step by Step)

1. Application & quick qualification call (10 minutes)
2. Submit credit package: 2 years tax returns, 3-6 months bank statements, equipment list, ownership proof
3. Equipment appraisal/inspection (most deals over $75K)
4. Approval & lease documents issued
5. Sign documents, lien filed, funds wired
6. Begin monthly payments 30 days post-funding

From application to funded: typically 5-10 business days.

The Other 6 Equipment Financing Structures You Should Know

Sale-leaseback is one of seven structures in the modern equipment financing toolkit:

1. Equipment Finance Agreement (EFA) — straight loan, immediate ownership
2. $1 Buyout Lease — tax-classified as a lease, functions like a loan
3. Fair Market Value (FMV) Lease — lowest payment, return/renew/buy at term end
4. TRAC Lease — built for trucks and titled rolling stock
5. Pre-Payable Equipment Loan — pay off early without penalty
6. Working Capital Reserve Lease — preserves bank credit lines
7. Sale-Leaseback (Cash Out) — the flagship

See all 7 structures explained →

For Brokers: Why Sale-Leaseback Is the Highest-Commission Deal in Equipment Finance

If you''re a broker (or thinking about becoming one), sale-leaseback deals typically pay 3-6 commission points — significantly higher than traditional equipment loans for three reasons:

1. Deal sizes tend to be larger ($100K-$1M+ is common)
2. Funding partners rely on you to pre-qualify both the equipment AND the borrower
3. Few brokers know how to source these — supply is constrained

A single $500K cash-out deal at 4 points = $20,000 commission. Two of these per quarter is the foundation of a six-figure brokerage.

Need a Sale-Leaseback Quote on Your Equipment?

If you''re a business owner with equipment you own free and clear, request a free, no-obligation valuation. Our funding network covers construction, trucking, manufacturing, agriculture, and most other equipment-heavy industries.

Request a Free Sale-Leaseback Valuation →

Frequently Asked Questions

Will I lose ownership of my equipment?

Practically, no — the equipment never leaves your property. The funding partner files a lien (just like a bank would on a loan), and at the end of the term you buy it back for $1, 10%, or FMV. The only way you lose the equipment is if you stop making payments — same as any other financing.

How fast can I get the cash?

5-10 business days from completed application is typical. Faster if all documentation is ready upfront.

What if my equipment still has a small loan balance?

That''s fine. The funding partner pays off the existing lien from the sale proceeds and you net the difference. Just disclose the lien upfront so it can be priced correctly.

Is the interest tax-deductible?

Lease payments are typically deductible as a business expense. Confirm tax treatment with your CPA — every situation is different.

What credit score do I need?

650+ FICO is ideal, but specialty lenders will fund deals down to ~600 with strong equipment value and business cash flow.

The Equipment Finance Academy is the broker operating system used by independent equipment finance brokers across the US and Canada. Learn the trade, get the tools, and place deals with our funding network — all in one platform.

Is equipment leaseback financing right for your business?

Sale-leaseback works best when you own titled or serialized equipment free and clear, need working capital in under two weeks, and would rather keep using the asset than sell it. If the equipment is already pledged to a lender, a payoff or subordination has to be arranged first.

How much cash can you get from a sale leaseback?

Most funders advance 50%–70% of orderly liquidation value, not retail value. Newer, brand-name, serial-numbered equipment gets the highest advance; specialty or heavily customized assets get the least.

How fast does a leaseback fund?

Typical timeline is 3–10 business days: application and bank statements, valuation or inspection, UCC/lien search, documents, then funding.

Keep reading

Related guides: how to become an equipment finance broker, building lender relationships, and all equipment financing product types.

Brokers: leaseback deals pay 3–6 points. See how the broker program places them.