Asset finance · Sale & leaseback
Sale and leaseback for assets you own outright
Sell the asset to a funder, lease it straight back, and keep working without losing a day.
In short
The kit never moves and the work never stops
Sale and leaseback does what the name says. You sell an asset you own outright to a funder at an agreed value, they pay you for it, and they lease it back to you on a fixed term. Nothing leaves the yard.
It suits businesses that bought equipment for cash and now want that cash back in the account — usually because a bigger opportunity has turned up and the money is worth more somewhere else.
Sale & leaseback — key terms
REF SLB- Typical term
- 24 to 60 months
- Initial outlay
- None — you are paid for the asset up front
- VAT treatment
- You may need to raise a VAT invoice on the sale; VAT then applies to the rentals
- End of agreement
- Buy back, extend or hand over, depending on how the agreement is written
- Balance sheet
- The asset comes off; cash and a lease liability go on
Usually requires the asset to be owned outright. Some funders restrict this to purchases made within the last three to six months. Speak to your accountant about the VAT position before proceeding.
Best suited to
When sale & leaseback is the right call
- Equipment bought outright that tied up more cash than intended
- Funding growth without giving away equity
- Smoothing out a lumpy year of capital spend
- Getting value from an asset without losing the use of it
The detail
What to check before you commit
Most funders want the asset owned outright with a clean purchase invoice. Some will only look at assets bought in the last three to six months; others will consider older kit if it has held its value. There are VAT consequences to the sale itself, so this is one to run past your accountant before you sign rather than after.
We will tell you at the first conversation whether your asset is likely to qualify and roughly what it will raise. If sale and leaseback is not the right route, asset refinance often achieves the same thing with less to unpick.
- Cash released quickly against an asset you already own
- You keep using the asset from the first day to the last
- No equity given away and no new shareholders
- Terms of 24 to 60 months
- Straight answer up front on whether your asset qualifies
Common questions
Questions we get asked
Straight away with most funders, and many prefer it — a recent purchase invoice makes the value simple to evidence. Some funders set a window of three to six months from purchase. Beyond that, asset refinance usually does the same job.
Usually you will need to raise a VAT invoice to the funder for the sale, and VAT is then charged on the rentals. If you are VAT-registered it generally washes through, but the timing can affect a quarter’s cashflow. Have your accountant look at it before you commit.
Sale and leaseback is a genuine sale — title passes to the funder and you lease the asset back. Refinance leaves ownership broadly where it is and secures funding against the asset. Sale and leaseback often raises a little more; refinance is usually quicker and has fewer tax consequences to think through.
Where to next
Related to this
Next step
Talk sale & leaseback through with someone who does it daily
Send the make, model and price and we will come back with indicative terms — usually the same working day.