By Corey Rockafeler
INTRODUCTION
Your CNC machines are paid off. Your forklifts? Owned outright. Your balance sheet shows $1.2M in equipment.
Your bank account shows $47,000.
A competitor just called. They're selling for $850K. You have 30 days to decide. This is the acquisition that doubles your revenue overnight—the one you've been waiting for.
But you don't have $850K. And by the time your bank finishes their 90-day underwriting process, someone else will own your competitor. Private equity wants 25% of your company. The SBA wants your firstborn and three years of tax returns.
The opportunity dies. Again.
Here's what kills me: You actually had the money the whole time. Those paid-off machines? They're worth $1.2M on the open market. You could've accessed $900K in under two weeks. Bought the competitor. Kept 100% ownership. And you'd be running a $15M business right now instead of watching someone else do it.
In this article, you'll discover how to turn owned equipment into working capital in 7-14 days—without bank approvals, without giving up equity, and without disrupting operations. You'll see real examples of $5M-$20M businesses that did exactly this. And you'll learn whether your equipment qualifies and what you can actually access.
Because the next time opportunity knocks, you won't be the one saying "I wish I had known this six months ago."
💡 Key Takeaway:
Owned equipment is working capital you can access in days, not months
Most business owners miss opportunities because they don't know this option exists
This article shows you exactly how it works and whether it's right for your business
What Is Equipment Sale-Leaseback?
Think of it like a cash-out refinance on your house—except it's for your business equipment, and you close in two to three weeks instead of two months.
Here's the simple version: You sell your equipment to a lender. They immediately lease it back to you. You get a check for 70-90% of the equipment’s auction or forced liquidation value. They get an asset-backed investment. You keep using everything exactly as you do right now.
Nothing moves. Nothing changes operationally. Your crew doesn't even know it happened.
The process in five steps:
Equipment appraisal establishes current liquidation value (not market value)
Lender purchases your equipment for a lump sum
You receive cash wire-transferred to your account
Lease agreement is created (typically 3-7 years)
Monthly lease payments begin (100% tax deductible)
Buyback option at end of term (often $1 or fair market value)
Your $1.2M in fully depreciated equipment that shows $0 on your balance sheet? It just became $900K in your bank account. Your CNC machines are still running. Your forklifts are still moving inventory. Your trucks are still making deliveries.
The only thing that changed is you now have capital to actually grow your business.
💡 Key Takeaway:
Sale-leaseback converts equipment equity into immediate working capital
Zero operational disruption—you keep using everything exactly as before
It's a financial transaction, not an equipment transaction
Why Sale-Leaseback Beats Traditional Financing
Let me show you what you're up against with traditional options—and why equipment sale-leaseback is different.
See the difference? Let me break down why this matters for your business.
Speed kills—or saves—deals. Banks take months because they're underwriting YOU. Sale-leaseback takes weeks because they're underwriting the EQUIPMENT. Asset-backed means lower risk, which means faster decisions. When that competitor calls about selling, you have two weeks to respond, not two quarters.
Use the money however you want. Banks restrict use of funds. "Working capital only." "No acquisitions." Sale-leaseback? Zero restrictions. Buy a competitor. Stock inventory. Hire ten people. Fund payroll through a slow season. It's your money. You're not borrowing—you're liquidating an asset you continue to use.
Your balance sheet actually improves. The cash influx strengthens working capital ratios. This can actually increase your borrowing capacity elsewhere. Banks see better liquidity. You've freed up collateral for other financing needs.
Keep 100% of your business. No equity dilution. No new partners asking questions. No board seats given away. You built this business—you keep it.
I've closed $250M+ in asset-based financing over 20+ years. I've seen the same pattern dozens of times: Business gets turned down by two, three banks. We appraise their equipment, advance $800K, close in 15 days. The equipment was always there. They just didn't know it was a credit line they were already approved for.
💡 Key Takeaway:
Sale-leaseback is 5-10x faster than bank financing
No restrictions on how you use the capital—it's truly yours
You preserve equity and improve your balance sheet simultaneously
What Equipment Qualifies?
Not all equipment works for sale-leaseback. Here's what does—and what doesn't.
Basic requirements:
Owned outright (fully paid off, no liens)
Good working condition
Clear resale market exists
Minimum $250K+ total value (though we've done smaller deals)
Equipment categories that work well:
Manufacturing: CNC machines, fabrication equipment, metal presses, injection molding equipment, industrial ovens
Transportation: Semi-trucks, trailers, box trucks, delivery vans, fleet vehicles (3+ units work best)
Construction: Excavators, bulldozers, loaders, cranes, backhoes, concrete equipment
Warehouse & Distribution: Forklifts, reach trucks, pallet jacks, conveyor systems, high-value racking
Food Service: Commercial kitchen equipment, walk-in refrigeration, HVAC systems
Medical/Dental: Imaging equipment (MRI, CT scanners, X-ray), dental chairs and equipment
What doesn't qualify:
Already pledged as collateral on another loan. Highly specialized equipment with no resale market (custom-built for your specific operation). Poor condition or obsolete technology. Equipment worth under $100K individually (unless part of a larger package).
Here's what trips up most business owners: Your accountant looks at your balance sheet and sees equipment with $0 book value. Fully depreciated. "No value," they say.
Wrong.
Book value is an accounting fiction for tax purposes. Market value is what someone will actually pay for it. I've seen equipment with $0 book value appraise for $1.2M. Your 2019 CNC machine didn't lose its value just because you depreciated it on your taxes.
Book value and market value live in completely different worlds.
💡 Key Takeaway:
Most standard business equipment qualifies if it's paid off and in good condition
Fully depreciated equipment (showing $0 on books) often has substantial market value
Equipment needs a resale market—generic is better than highly specialized
Real Numbers - What You Can Actually Access
Let me show you exactly what this looks like with three real businesses I've worked with. Numbers, timelines, outcomes—the whole story.
First, understand advance rates: You'll typically get 70-90% of your equipment's auction or forced liquidation value. What determines the rate? Equipment type, condition, age, how easy it is to resell, and your company's creditworthiness.
Now let's look at real deals.
Case Study 1: $5M Precision Manufacturer
The situation: Family-owned machine shop. Been in business 18 years. A competitor called—going out of business, willing to sell for $850K. It was the perfect fit: same customer base, complementary capabilities, trained employees who knew the work.
Problem? They needed the money in 30 days. Their bank said no—debt-to-equity ratios were "too high." Translation: "Come back when you don't need the money."
The equipment: Six CNC machines (5-axis, purchased 2016-2019), metal fabrication equipment, quality control systems. Book value on the balance sheet? $0. Fully depreciated.
Appraised liquidation value? $1.2M.
The deal:
Advance: $900K (75% of liquidation value)
60-month lease term
Monthly payment: $18,500
Time to close: 11 days
What happened: They bought the competitor. Added 15 employees who already knew the customers. Revenue went from $5M to $15M in 18 months. The monthly lease payment? Covered easily by the new revenue.
The owner told me later: "We were so focused on what the bank would or wouldn't do, we forgot we were sitting on the solution."
ROI on that $850K investment? Their business is now worth 5x what it was.
Case Study 2: $12M Regional Distributor
The situation: Growing distributor needed a second warehouse. The location was perfect—30 miles from the main facility, right off the interstate. They needed $600K for buildout, initial inventory, and staffing.
Banks wanted to lend, but the covenants were ridiculous. Inventory turn ratios, debt coverage requirements that would've handcuffed growth. And the owner wasn't interested in giving up equity after bootstrapping for 14 years.
The equipment: Twelve forklifts (various capacities), eight delivery trucks (3-5 years old), high-value warehouse racking system. Total appraised liquidation value: $800K.
The deal:
Advance: $600K (75%)
60-month lease
Monthly payment: $12,400
Closed in 10 days
What happened: Second location opened on schedule. No equity dilution. They preserved their existing credit lines for other opportunities. The new location hit profitability in month nine.
The CFO said something I'll never forget: "We forgot our balance sheet was sitting on $600K we could access in two weeks. We were so obsessed with the P&L."
Case Study 3: $8M Commercial Contractor
The situation: This contractor had a serious problem—and a serious opportunity. Major project pipeline worth $12M, but their bonding company said no. Why? Working capital ratios weren't strong enough. They needed $1.2M to improve the numbers.
Banks were nervous about seasonal cash flow. Construction has feast-or-famine months, and underwriters hate that.
The equipment: Heavy equipment—excavators, loaders, bulldozers, plus a fleet of trucks and trailers. All well-maintained, current models. Liquidation value at $1.6M.
The deal:
Advance: $1.28M (80%—high-quality, liquid equipment commands better rates)
72-month lease term
Monthly payment: $21,100
Closed in 12 days
What happened: Working capital ratios improved immediately. Bonding capacity increased 40%. They won $12M in new contracts they couldn't have bid on before.
Bonus: The lease payments are 100% tax deductible. Annual tax savings? About $55K compared to the old depreciation schedule.
Equipment is still running on job sites every day. Nothing changed operationally.
💡 Key Takeaway:
Real businesses are accessing $600K-$1.2M+ in under two weeks using equipment they already own
Monthly payments are manageable and covered by the growth the capital enables
The pattern is consistent: banks say no, equipment says yes, business grows
The Tax & Financial Benefits Nobody Talks About
Beyond the immediate cash, there are some real advantages here that most business owners miss.
Tax deductions that actually matter:
Your lease payments? 100% tax deductible as an operating expense. Compare that to depreciation, which stretches over 5-7 years and gives you a fraction of the benefit each year.
Example: $15,000 monthly lease payment = $180,000 annual deduction. At a 30% effective tax rate, that's $54,000 in tax savings. Every year.
Under the old depreciation schedule? You might've been deducting $30,000 in year one. The difference—$24,000 annually—is real money.
Your balance sheet improves:
The cash influx immediately strengthens your working capital ratios. Banks notice. This can actually increase your borrowing capacity for other needs—because now you look more liquid, more stable.
You've also freed up collateral. That equipment was just sitting there on your books. Now it's working capital, and your balance sheet looks stronger than it did yesterday.
Cash flow becomes predictable:
Fixed monthly payments. No surprises. No balloon payments lurking three years out. You can budget with confidence.
And here's the strategic piece: You're preserving your credit lines for other opportunities. That bank line? Save it for emergency working capital or a deal that comes up in six months. Your equipment is funding today's growth.
You're matching equipment cost to revenue generation. The machines generate revenue. The lease payment comes from that revenue. It's a natural fit.
Important disclaimer: Tax implications vary depending on your business structure, how the lease is classified, and about a dozen other factors. Always—and I mean always—consult your CPA before making any financing decisions. This is general information, not tax advice for your specific situation.
But here's what I know after 20 years: Most business owners are shocked when their accountant runs the numbers and shows them the actual tax benefit.
💡 Key Takeaway:
Lease payments are fully deductible, creating immediate tax benefits vs. slow depreciation
Sale-leaseback often improves balance sheet ratios and borrowing capacity
Predictable payments and preserved credit lines give you strategic flexibility
When Does This Make Sense For Your Business?
Let me be straight with you: Sale-leaseback isn't right for everyone. Here's how to know if it fits your situation.
✅ This is a great fit if:
You need capital fast: There's an acquisition opportunity and the seller wants an answer in 30 days. You landed a huge contract that requires immediate inventory buildup. A piece of real estate came available that's perfect for expansion. Emergency working capital to cover a gap. Whatever it is—you can't wait 60-90 days for a bank.
You want to preserve equity: You bootstrapped this business. You're not interested in investors asking questions at every turn. Or maybe your company's current valuation is too low—you know you're worth more in two years, so why sell a piece now? You want to maintain full control. Period.
Traditional financing already said no: Two banks declined you. Maybe your debt ratios don't fit their boxes. Maybe you had a tough year that spooked underwriters. But your cash flow is actually strong and your business is solid. You just don't fit the template.
Your cash flow can handle it: You're doing $1M-$20M in revenue. The business is growing or stable. You can comfortably handle a monthly lease payment. You've run the numbers—the payment fits in your cash flow without creating stress.
You have valuable equipment: You own $250K+ in equipment. It's well-maintained, good condition. There's a clear resale market—standard manufacturing equipment, trucks, construction machinery, not some custom contraption you built in your garage.
❌ This is NOT a fit if:
Cash flow is shaky: You can't support the monthly payments. Revenue is declining and you're not sure why. You have long seasonal dry periods without cash reserves to cover the gap. Adding a fixed monthly obligation would create stress, not solve problems.
Equipment issues: Your equipment is already pledged as collateral on another loan. It's obsolete—technology moved on and nobody wants to buy 15-year-old machinery. It's highly specialized for your unique operation with zero resale market. It needs major repairs. Or frankly, the total value is under $100K and it's just not worth the effort.
Timing is wrong: You don't actually need the capital—you just think you might someday. Or you actually do have time—three months to close isn't a problem, so go get a bank loan at a lower rate. Sale-leaseback is for speed and flexibility, not just because it exists.
Look, I turn down deals. If your cash flow can't support payments, I'll tell you this isn't the right tool. If your equipment doesn't qualify, I'll tell you that too. There's no point wasting your time or mine on something that doesn't fit.
But if you checked four or five boxes in that "great fit" section? Let's talk.
💡 Key Takeaway:
Sale-leaseback is ideal for businesses with strong cash flow but tight timelines
Equipment quality and cash flow strength matter more than perfect credit
If it's not right for you, it's not right—and that's okay
The Process: 7 to 14 Days From Start to Funding
Here's exactly what happens, step by step. No mystery, no surprises.
Days 1-3: Equipment Appraisal
We get your equipment appraised. Sometimes it's an independent appraiser who comes on-site. Sometimes it's a desktop valuation based on comparable sales data, equipment age, and condition. Either way, we're establishing current market value—not what your books say, but what the equipment would actually sell for today.
Days 3-5: Credit Review
We look at your financials. Last two years of profit and loss statements, balance sheet. We're analyzing cash flow—can your business comfortably support the monthly lease payments? This isn't a deep-dive credit investigation. We're making sure the deal makes sense for everyone.
Days 5-7: Term Sheet
You get a term sheet. It shows the advance amount (how much cash you'll receive), the lease term length, your monthly payment, and purchase options at the end. Everything in writing, nothing hidden. You review it, ask questions, and decide if it works for you.
Days 7-12: Documentation
If you're moving forward, we handle the paperwork. Sale agreement (you're selling the equipment). Lease agreement (we're leasing it back to you). UCC filings (standard security filings). Your attorney can review everything—in fact, we encourage it.
Days 12-14: Funding
Final signatures. Wire transfer hits your account. Done.
Zero operational disruption:
Your equipment never moves. It stays exactly where it is. You maintain possession and use. Your team keeps working. Your production schedule doesn't skip a beat. The only thing that changes is you now have capital in your bank account.
From the day you call me to the day cash hits your account: 7-14 days, depending on how quickly we can move through appraisals and documentation.
Compare that to 90 days at a bank—where you're still not guaranteed approval.
💡 Key Takeaway:
The entire process takes 7-14 days from inquiry to funding
Documentation is straightforward—sale agreement and lease agreement
Zero disruption to operations—equipment stays put and keeps working
What You're Probably Thinking Right Now
Let me address the questions I hear on every single call.
"This sounds like distressed financing. Isn't this what failing companies do?"
No. Fortune 500 companies use sale-leasebacks strategically all the time. It's capital allocation, not desperation. You're choosing speed and flexibility over traditional debt. There's nothing "distressed" about recognizing your equipment has value and choosing to access it.
The distressed move? Waiting until you're out of options. The smart move? Using every tool available when opportunity knocks.
"What if I can't make the payments?"
Then this isn't the right tool, and I'll tell you that upfront. The underwriting process ensures the payments fit your cash flow. We're not here to set you up to fail—we're here to help you grow. Most leases also have early buyout options if your situation changes and you want to own the equipment outright again.
If your cash flow is uncertain, we'll have that conversation honestly. No point moving forward with something that creates stress instead of solving problems.
"Will this hurt my credit or borrowing capacity?"
Actually, it often helps. The cash influx improves your working capital ratios. Banks see better liquidity. This can increase your borrowing capacity elsewhere because you look more stable. And you've freed up collateral—that equipment was just sitting on your books. Now it's working capital, and you can use other assets for different financing needs.
"What happens when the lease term ends?"
You typically have three options: buy the equipment back (often for $1 or fair market value), extend the lease, or return the equipment. The buyout terms are negotiated upfront—no surprises five years from now. Most businesses choose to buy back and own everything outright again. You're basically getting back to where you started, except you had access to $800K for five years that helped you grow.
"Isn't this expensive compared to a bank loan?"
Compare total cost to opportunity cost. What's the cost of NOT having the capital? Missing an acquisition that would've doubled your revenue? Losing a contract because you couldn't stock inventory? Watching a competitor grab the real estate you wanted?
Plus, tax benefits offset the cost. Lease payments are fully deductible. And if the capital helps you grow—which it should—the ROI far exceeds the financing cost.
I worked with a manufacturer who paid $18,500/month for five years. Total cost? About $150K more than a bank loan would've been. But that $900K let them acquire a competitor and triple their revenue. They made the $150K back in the first quarter.
💡 Key Takeaway:
Sale-leaseback is strategic, not distressed—major companies use it regularly
Underwriting ensures payments fit your cash flow before you commit
When used for growth, the ROI typically far exceeds the financing cost
Your Equipment Is More Powerful Than You Realized
Here's what I want you to remember: Your owned equipment isn't just keeping operations running. It's a strategic financial asset most business owners completely overlook.
While your competitors wait 90 days for bank approvals—or give away 20% of their company to investors—you can access $250K-$2M in 7-14 days. Keep 100% ownership. Keep running your business exactly as you do today.
The businesses that win aren't always the ones with the best products or the hardest workers. They're the ones who recognize their balance sheet is more powerful than they realized. And they move fast when opportunity shows up.
Next time a competitor calls about selling. Next time you need to stock inventory for the busy season. Next time the perfect location becomes available. You'll know exactly what to do.
You won't be the one saying "I wish I'd known about this six months ago."
Frequently Asked Questions
How much can I access against my equipment?
Typically 70-90% of appraised market value. The exact amount depends on equipment type, condition, age, and how easy it is to resell. We've done deals ranging from $250K to $5M+. A $1.2M equipment portfolio usually generates $900K-$1M in available capital.
How long does the process take?
7-14 days from your first call to cash in your account. Compare that to 60-90 days for traditional bank financing—where you're still not guaranteed approval.
What if my equipment is fully depreciated on my books?
Book value and market value are completely different. Equipment showing $0 on your balance sheet often has significant market value. Your 2019 CNC machine didn't lose its value just because you depreciated it for taxes. We appraise based on current market value, not what your accountant wrote down.
Do I lose use of my equipment?
No. You continue operating equipment exactly as you do now. The only change is financial—you lease what you used to own. Nothing moves. Nothing changes operationally. Your crew won't even know the difference.
What are typical lease terms?
Usually 36-84 months (3-7 years). Terms depend on equipment type and your preferences. Monthly payments are fixed—no surprises, no balloon payments lurking at the end. You know exactly what you're paying every month.
Can I use the money for anything?
Yes. Unlike bank loans, there are zero restrictions on use of funds. Buy a competitor. Stock inventory. Hire people. Fund payroll through a slow season. Expand to a second location. Whatever your business needs—it's your money.
What if I want to buy the equipment back early?
Most leases include early buyout options that are negotiated upfront. If your situation changes and you want to own the equipment outright again, you typically can. Terms vary, but we structure deals with flexibility in mind.
💡 Final Takeaway:
Your owned equipment is working capital waiting to be accessed
While competitors wait months, you can move in days
The next opportunity won't wait—make sure you're ready
