Equipment Sale-Leasebacks in Texas
A sale-leaseback is a transaction where a business sells equipment it already owns to a lender or lessor and then immediately leases it back. The business receives cash equal to the equipment's appraised value and continues using the equipment under a lease. Sale-leasebacks are used to unlock capital from owned assets without giving up operational use.
- Advance: typically 70–90% of the equipment's appraised liquidation value
- Equipment age: most lenders accept equipment up to 10–15 years old depending on type
- Term: 24–84 months
- Ownership: transfers to the lender at sale; lessee retains use rights
- Use cases: working capital, debt payoff, down payment on acquisition, expansion capital
Overview
A sale-leaseback is one of the few financing structures that generates immediate liquidity from assets already on the business's balance sheet. Instead of taking on new debt to fund operations, the business sells existing equipment to a lessor, receives cash proceeds, and continues using the equipment under a lease agreement.
The transaction is structured in two simultaneous steps: the sale and the leaseback. At closing, the business signs a bill of sale transferring ownership to the lessor and simultaneously executes a lease giving the business the right to use the equipment for a fixed term. The net result is cash in hand, equipment still in use, and a new monthly lease obligation.
The amount available depends on the equipment's current market value — specifically, its forced liquidation value, which is the amount a lender could recover selling the equipment quickly in an auction or dealer channel. Lenders typically advance 70–90% of forced liquidation value, not the equipment's replacement cost or book value.
In Texas, sale-leaseback is particularly active in oilfield services, construction, and transportation, where businesses own significant equipment fleets. A trucking company with 20 owned trailers, a concrete contractor with an excavator fleet, or an oilfield services firm with well servicing units can each access substantial capital through a sale-leaseback without taking on traditional debt or diluting ownership.
One important note: a sale-leaseback is a taxable event. The sale of the equipment at a gain relative to its depreciated book value may trigger capital gains or ordinary income, depending on the asset's depreciation history. Confirm the tax impact with your accountant before proceeding.
Verified Lenders
This category is being populated.
Lenders are added as they pass The Registry Standard verification. Check back or use the Get Matched form to describe your situation directly.
Frequently Asked Questions
How much can I borrow in a sale-leaseback?
Typically 70–90% of the equipment's forced liquidation value — the amount a lender could recover by selling the equipment quickly. This is generally lower than replacement cost and may differ from book value. A formal appraisal or equipment value estimate is required before a lender issues a term sheet.
What happens to the equipment if I can't make lease payments?
The lessor owns the equipment after the sale. If you default on the lease, the lessor can repossess it. Your remaining lease payments may also be due as liquidated damages depending on the lease terms. Review the default and early termination provisions before signing.
How old can the equipment be for a sale-leaseback?
Most lenders accept equipment up to 10–15 years old, depending on the asset type. Construction equipment and trucking fleets can often qualify older. Specialized oilfield equipment is evaluated based on remaining useful life and market demand rather than age alone.
Can I do a sale-leaseback if the equipment has an existing loan?
Yes, if the sale proceeds exceed the loan payoff amount. The existing lender must be paid off at closing from the sale proceeds, with remaining funds going to the business. If the equipment is deeply underwater, a sale-leaseback may not generate enough proceeds to cover the payoff.
Related Categories
Page last updated: August 2026