How does an equipment leaseback work, and who does them?
If your business owns equipment outright, a leaseback turns its value into cash while the equipment keeps working. Here’s how Five West’s leaseback works step by step, what qualifies, what the payments look like, and what to ask any company that offers one.
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How does an equipment leaseback work?
Much like an equipment loan, except the equipment is already in your yard. Here’s the order things happen in with us:
- You send the list. Everything you own free and clear and want to pledge: year, make, model, and serial numbers where you have them. An insurance schedule or a depreciation schedule works as the list.
- We value it and review your credit. The equipment is valued against its resale market. We look at your credit and whether the business’s cash flow supports the payment. Together, those set the amount and the term.
- You get an offer. A lump sum on an Equipment Finance Agreement, repaid monthly over a term of up to 60 months.
- You e-sign and get funded. Money follows 2 to 5 business days after signing, once the equipment’s value is confirmed. When a deal needs a third-party appraisal, that’s usually the longest step.
- You keep working. The equipment never leaves your yard. Pay early and there’s no penalty on most approvals. Once the balance is paid, the lien is released.
Having your equipment list ready speeds things up a lot, so I’d have it done before you apply. Our equipment leaseback page has the full program details.
Is a Five West leaseback a sale-leaseback?
No. If you searched for an equipment sale-leaseback, here’s the one difference to know: with Five West, nothing is sold and ownership never transfers. You pledge the equipment, a lien is filed against it, and you stay the owner from the first payment to the last.
A lien gives the lender a claim on the equipment until the debt is paid, and it goes on public record. On machinery, that record is usually a UCC-1 financing statement filed with the state. On a truck or trailer with a title, the lien is usually noted on the title. When you’ve paid in full, the lien is released. For a UCC filing, a termination statement ends it.
Since you still own it, the equipment stays on your books and on your balance sheet. How the new debt gets reported, and what it means for depreciation you’ve already taken, are questions for your CPA. And if an old loan came with a blanket lien on everything the business owns, that lien can cover this equipment too, so tell us about it up front and have your attorney read the agreement before you pledge anything.
Which companies do equipment leasebacks?
Five West Financial does. We’re a nationwide commercial finance company in Tempe, Arizona, and the leaseback is one of the four ways we fund a business, along with equipment finance, equipment leases and SBA 7(a) loans.
Here’s what I’d look for in any leaseback company. Every point is how ours works:
- You keep ownership. The equipment is pledged, and the lien comes off when you’ve paid.
- One monthly payment on a set term, up to 60 months with us.
- No penalty for paying it off early, on most approvals.
- A value tied to the resale market. An inspection or appraisal sets the final number.
- A timeline you hear up front. Ours is funding 2 to 5 business days after signing.
- No strings on the money. Leaseback proceeds are unrestricted.
- A soft credit inquiry to start, and a straight answer if your equipment won’t work, along with what might.
- One person on your file from application to funding.
What equipment qualifies for a leaseback?
Equipment that holds value on its own and has a resale market, owned outright with no liens. Here’s the list:
| Equipment category | Leaseback collateral? | Examples and notes |
|---|---|---|
| Transportation | Eligible | Day cabs and trailers |
| Vocational | Eligible | Dump trucks, mixers, roll-offs, wreckers |
| Construction | Eligible | Excavators, dozers, cranes, HDD rigs |
| Materials handling | Eligible | Forklifts |
| Machine tools | Eligible | EDMs and grinders |
| Manufacturing | Eligible | Injection molding presses |
| Packaging, industrial, livery and medical | Eligible | Owned outright, no liens |
| Food service | Eligible | Serialized equipment with resale value |
| Class 8 sleepers | Excluded | A purchase or refinance may still work |
| Forestry equipment | Excluded | Often financeable through a purchase or refinance; ask |
| Commercial printers | Excluded | Often financeable through a purchase or refinance; ask |
Categories from our equipment leaseback page, with examples from our industry pages and leaseback guides, checked November 2, 2026. Ask about anything not listed.
The business needs a 600+ FICO and at least two years in business. There is no age limit, though older equipment can be tougher to get done.
Running a construction company? Our construction equipment financing page covers leasebacks on paid-off excavators, dozers and cranes. Contractors who own dump trucks or trailers outright can pledge those too.
How much can you get from an equipment leaseback?
That depends on what the equipment would bring on the resale market and on your credit file. We size each deal from both, so there’s no set amount to quote before we see the list.
Our Quote Builder asks what you paid, when you bought it, the model year and what you think it’s worth today. Your estimate is a starting point. An inspection or appraisal sets the final number. List every piece you’d pledge, because the whole schedule is valued together.
Here’s what the payments look like for an established business:
| Lump sum | 36 months | 48 months | 60 months |
|---|---|---|---|
| $50,000 | $1,590 | $1,244 | $1,038 |
| $100,000 | $3,180 | $2,489 | $2,076 |
| $250,000 | $7,950 | $6,221 | $5,190 |
Estimates for an established business (two or more years in business) on an Equipment Finance Agreement. They’re examples, not quotes. Your actual payment depends on credit, the equipment and the term.
The shorter term costs less overall. On $100,000, the 36-month payments add up to about $114,479, against about $124,550 over 60 months. You can price your own in the Quote Builder with no credit pull.
Can you cash out equipment you still owe on?
Not through a leaseback. The equipment has to be fully paid off with no liens, because the deal depends on a clear title.
Still paying on it and want cash out or a lower payment? Ask us about a refinance. When there’s a balance with another lender, a refinance may be the better route, and we’ll look at it. I can’t promise one before we’ve seen the file, and our programs are built to fund equipment and growth, so they aren’t set up to fix payments that are already behind.
If some of your equipment is paid off and some isn’t, the pieces you own free and clear can still be pledged. One snag to clear up early: a loan you paid off years ago whose lien was never released. Ask the old lender for the release now so it doesn’t hold up your file.
Can you do a leaseback on equipment you just bought with cash?
Yes. If you paid cash and own it free and clear, it can be pledged like anything else you own. You’ll see this called a purchase leaseback or a capital reimbursement. Keep the original invoice and proof of payment handy, since the application asks when you bought it and what you paid.
Haven’t bought yet? I’d finance the purchase instead. An equipment finance agreement runs 24 to 84 months, you own the equipment from day one, and the cash stays in the business from the start.
What can you use leaseback money for?
Whatever the business needs. The proceeds are unrestricted, and these are the common uses:
- Payroll through a slow season
- Mobilizing for a job that pays later
- Inventory or materials
- Insurance renewals
- Buying more equipment
- Paying off more expensive short-term debt
Where I think a leaseback fits best is a cash gap with a clear end, like a job that pays once it’s finished or a slow stretch before booked work starts. If the business is losing money month after month, a new payment usually makes that harder, and we’ll tell you so.
Is there a leaseback guide for your industry?
We’ve written six so far. Each one goes into what’s different about that equipment:
| Guide | Equipment it covers | What it gets into |
|---|---|---|
| Crane leasebacks | Boom trucks, rough-terrain, all-terrain and crawler cranes | Why cranes keep their value for decades, and two questions to ask about any valuation |
| Excavation equipment leasebacks | Excavators, dozers, wheel loaders, motor graders, articulated trucks | What moves an appraisal (undercarriage, brand, service records) and when to pass on a leaseback |
| Utility and pipeline leasebacks | HDD rigs, hydrovacs, trenchers, sidebooms | Appraising thinly traded gear, and the mobilization and retainage costs a leaseback can carry |
| Molding press leasebacks | Injection molding presses and auxiliaries | Presses listed as “call for price,” and why molds your customers paid for can’t be pledged |
| Tool and die leasebacks | EDMs, grinders, spotting presses, CMMs | Covering the last third of a tooling payment, and leasebacks ahead of an ownership change |
| Dump trailer leasebacks | Rental fleet dump trailers | Financing new trailers, borrowing against paid-off ones, and keeping titles in order |
Not on the list? Every eligible category works the same way. Send us the list, and we’ll tell you what your equipment supports before you commit to anything.
Frequently asked questions
Who does equipment sale-leasebacks?
Five West Financial does equipment leasebacks for businesses nationwide, with no sale involved. Ours is structured as an Equipment Finance Agreement, so ownership never transfers. You pledge equipment you own free and clear, a lien is filed against it, and the lien is released when the balance is paid.
Do I keep ownership of my equipment in a leaseback?
Yes. With a Five West leaseback, the equipment stays yours, stays on your books and stays in service. The lien filed against it is released once the balance is paid.
What credit score do I need for an equipment leaseback?
Generally a 600 or higher FICO, with at least two years in business. Because the deal is secured by equipment you already own, the equipment’s value carries weight in underwriting alongside credit and cash flow.
How long does an equipment leaseback take to fund?
Funding follows 2 to 5 business days after the documents are signed and the equipment’s value is confirmed. A third-party appraisal, when the deal needs one, is usually the longest step, and having your equipment list ready speeds things up.
Can I do a leaseback on equipment that isn’t paid off?
Not as a leaseback. The equipment has to be owned free and clear, with no liens. If there’s still a balance with another lender, a refinance may be possible, so ask and we’ll look at it.
What equipment can’t be used for a leaseback?
Class 8 sleepers, forestry equipment and commercial printers are excluded as leaseback collateral. They’re often financeable through a purchase or refinance instead, so ask.
Can I pay off an equipment leaseback early?
Yes. Most approvals have no early payoff penalty, and the lien is released once the balance is paid.
Own equipment free and clear?
Send us the list of what you own outright. One short application and a soft credit inquiry get you a dedicated funding professional from application to funding.
This article is general information about equipment leasebacks and equipment financing, not tax, legal or accounting advice or a commitment to finance. Example payments are estimates for an established business; actual terms and payments depend on credit approval, the equipment and the structure. All financing is subject to credit approval and underwriting.