Sale and leaseback: releasing cash from equipment you already own

Last updated 6 November 2026 · Reviewed by 360 Asset Finance Compliance

How does sale and leaseback work for equipment, step by step?

1. Choose the assets. These are vehicles or equipment your business already owns and uses, such as trucks, yellow goods, plant or machinery.
2. The lender checks the asset. It confirms you own it, checks its value and condition, and may arrange an inspection or valuation.
3. The lender buys the asset. Your business sells it to the lender and receives the agreed amount, less any existing finance that has to be paid out.
4. You lease it back. Your business signs a lease and keeps using the asset, making regular lease payments.
5. End of term. Depending on the agreement, you may be able to pay a residual and take the asset back, refinance it, or return or trade it.

What kinds of assets can be used?

Lenders on our panel may consider most business assets that hold their value, such as trucks and trailers, earthmoving equipment, plant, forklifts, manufacturing machinery and medical equipment. Whether an asset is accepted depends on its type, age, condition and value, and on the lender's criteria. The lender will usually want proof that your business owns the asset, such as the original invoice, and will check the PPSR for any money owing on it.

If there's still finance on the asset, the existing lender generally has to be paid out from the sale proceeds first. Your broker can explain how that works for your asset.

Sale and leaseback or a new loan secured by the equipment: how do they compare?

Another way to release cash from equipment you own is a new loan secured by that equipment, such as a chattel mortgage. The main differences:

A general summary only: exact terms depend on the lender and the agreement.

What tax and GST points should I raise with my accountant?

We don't give tax advice, but these are the questions worth asking before you sign:

• How selling the asset affects your business's tax position, including any depreciation already claimed.
• Whether GST applies to the sale and how it's handled.
• How the lease payments are treated for tax and in your accounts.
• What happens to your tax position at the end of the lease if you pay a residual and take the asset back.

Pros and cons

Possible pros:

• Turns equipment you already own into cash for the business.
• You keep using the asset day to day.
• Cash can go towards working capital, growth or other business needs.
• Regular lease payments can be planned for.

Possible cons:

• Your business no longer owns the asset during the lease.
• Lease payments include interest and fees, so the total paid is generally more than the cash received.
• The lender may pay less than you think the asset is worth.
• Selling the asset can have tax and GST consequences.
• Missing lease payments puts the asset at risk.

Whether it suits your business depends on your cash flow, the asset and your tax position. Your accountant can help you weigh it up.

How can 360 Asset Finance help?

We know how different assets are used and valued, and which lenders specialise where. For a sale and leaseback, we can:

• arrange sale and leaseback through our lender panel, subject to the lender's criteria;
• compare it with other options, such as a loan secured by the equipment, across our panel;
• tell you what the lender needs, usually proof of ownership, details of the asset, your ABN and business details;
• work with your accountant on the tax and GST questions;
• manage the application and any payout of existing finance through to settlement;
• help you plan the next step, such as upgrading or adding assets later.

FAQs

Sources and further reading:business.gov.au: Leasing or buying vehicles and equipment · business.gov.au: Cash flow · ATO: Simpler depreciation rules for small business

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. Finance is provided by the lender you choose and is subject to its lending criteria; fees and charges apply. 360 Asset Finance is a trading name of Kuone Consulting Pty Ltd (ABN 75 647 329 002), Australian Credit Licence 566705.