Free Up Cash With Equipment Refinancing and Sale-Leasebacks
July 16, 2026
Most equipment financing conversations start with a purchase. You need a machine, you finance it, you put it to work. But there is another side to financing that gets far less attention and can be just as valuable: using equipment you already own to free up cash.
If you have cranes or heavy equipment that are paid off, or financed with significant equity built up, that value does not have to sit idle. Two tools, equipment refinancing and the sale-leaseback, let you turn that equity into working capital you can use for payroll, a down payment on the next unit, a tax bill, or simply a cushion when work is seasonal. Here is how they work and when they are worth considering.
Refinancing equipment is similar in spirit to refinancing a building. You take equipment that is paid off or close to it, and you place new financing against it, putting cash in your pocket based on the value of the asset. You then make payments on that new loan over an agreed term.
Companies refinance equipment for a few reasons. The most common is to raise working capital without selling a machine they need. Others refinance to consolidate several smaller obligations into one payment, or to replace expensive short-term debt with a longer, more manageable structure. The equipment keeps working the whole time.
A sale-leaseback is a close cousin. In this structure, you are essentially asking a lender to reimburse you for a piece of equipment you just purchased. Maybe you needed to move on a unit quickly so you decided to pay cash, and now you want to finance it. You are basically selling the unit to a finance company, and at the same time you lease it back, hence Sale-Leaseback. You get a lump sum for the sale, and you keep using the equipment exactly as before, now making lease/loan payments instead of owning it outright.
Refinancing and sale-leasebacks are not for every situation, but they fit a handful of common ones well.
A growing company that wants to buy another crane but would rather not drain its cash reserves can pull equity out of a paid-off unit to fund the down payment. A business with a strong backlog but a temporary cash crunch can smooth things out without turning down work. A company carrying several high-rate obligations can use a refinance to consolidate into one cleaner payment.
The equipment itself carries a lot of the deal. Lenders look at the make, model, age, condition, hours/miles, and current value of the unit, because that value supports the financing. Well-maintained, in-demand equipment supports a stronger advance. Customers keep in mind that value is not typically one to one, meaning if the unit is worth $100,000, the will not get a $100,000 advance. More likely, they will get approximately 70-80% of the value.
They also look at the business behind it, the same way they would on a purchase. Time in business, financial strength, and borrowing history all factor in. Because there is no dealer invoice in a refinance or sale-leaseback, expect to provide documentation that establishes clear ownership and current value, and expect a lien search to confirm the equipment is free and clear or that any existing payoff is handled at closing.
There is no free capital. When you refinance or sell and lease back, you are taking on a new payment, and over the full term you will pay more than the cash you receive today. That is the cost of liquidity, and whether it is worth it depends on what the cash does for you. Capital that funds a down payment on a revenue-generating crane, or that keeps a profitable company running through a slow stretch, can easily be worth more than its cost. Capital that simply covers a shortfall with no plan behind it is a different story. With a refinance or a sale lease back it is always a good idea to check with your CPA or accountant to make sure it is beneficial.
Equipment values move. Tight supply and strong demand can hold used values up, which can support a healthier refinance. Softer markets work the other way. If you are considering pulling equity out of a machine, the value of that machine today is part of the timing decision. A finance partner who watches the equipment market every day can give you a realistic read on what your unit will support before you commit to anything.
Refinancing and sale-leasebacks are not the right move for every company, but they are useful tools that too many owners overlook. If you have equity tied up in equipment and a productive place to put cash, it is worth understanding your options. At Harry Fry & Associates, we structure purchases, refinances, and leasebacks every day, and we are glad to walk through whether one of these makes sense for your business.
