Sale-and-leaseback: release equity from owned UK plant and equipment

Sale-and-leaseback turns an owned asset into working capital without losing operational use. The company sells the asset to a finance lender at trade value, takes the cash, and leases it back over 24 to 60 months. Common use cases: clearing a hire purchase balloon, funding a stock buy, paying down an MCA, or bridging an HMRC bill.

How it works

The company identifies an owned asset with clear title (no existing finance).
An independent valuer assesses the asset at current trade value.
The finance company offers to buy the asset at typically 70% to 90% of trade value.
On completion, title transfers to the finance company, cash transfers to the business.
A lease-back agreement runs for 24 to 60 months at a fixed monthly amount.
At end of term, the lease typically includes a peppercorn purchase option or a return-and-replace clause.

The asset never moves operationally. The same vehicle is on the same forecourt, the same forklift is in the same warehouse, the same machine is in the same factory.

Who it suits

Asset-rich, cash-tight businesses. Fully-paid-off plant, vehicles or equipment sitting on the balance sheet, but the bank balance is constrained.
Companies clearing a balloon. Use sale-and-leaseback against asset A to clear the balloon on asset B.
Post-decline situations. When unsecured term lending has declined but the company has a clean asset base.
Sector-specific scenarios. Construction, haulage, manufacturing, agriculture, plant hire.
Working-capital diversification. Reducing reliance on MCA or invoice finance by adding a fixed-cost asset-backed line.

Worked example, £150,000 release on a haulage fleet

A haulage business owns three 4-year-old DAF tractor units outright, total trade value £180,000. The company has an active MCA at £45,000 outstanding, a £30,000 VAT bill due in 8 weeks and a stock purchase opportunity of £60,000.

Sale-and-leaseback advance: 85% of trade value = £153,000.
Lease-back term: 48 months at indicative 11% per year = approximately £3,950 per month.
Use of funds: £45,000 to clear the MCA, £30,000 ringfenced for the VAT bill, £60,000 for the stock buy, £18,000 retained as working-capital headroom.
Net effect: the MCA daily withhold is gone, the VAT bill is funded without an HMRC TTP, the stock opportunity is taken, and the monthly fixed cost is £3,950 (predictable) instead of variable MCA pressure.

The fleet stays on the road. The drivers do not notice. The cashflow profile changes from variable-and-tight to fixed-and-headroom.

What to avoid

Sale-and-leaseback to fund running costs with no recovery plan. The product is best for one-off equity release with a defined use, not for funding ongoing losses.
Stretching the leaseback term beyond the asset's remaining life.
Sale-and-leaseback the same week as a bank refinance. The bank will see the asset disposal in the accounts and reprice; better to coordinate.
Treating it as off-balance-sheet under FRS 102. From 1 January 2026 the leaseback liability sits on balance sheet alongside the cash from sale.

FAQs

What is sale-and-leaseback?

A finance arrangement where a company sells an owned asset to a finance company at its current market value and immediately leases it back over a fixed term. The company gets a cash lump sum, retains operational use of the asset, and pays a regular monthly amount over the lease term.

How is sale-and-leaseback different from a secured loan?

A secured loan keeps title with the company and uses the asset as collateral. Sale-and-leaseback transfers title to the finance company and the company becomes the lessee. Lenders are sometimes more willing to fund sale-and-leaseback than a secured loan against the same asset because their position is cleaner on default.

How much equity can I release?

70% to 90% of trade value, depending on asset type, age, condition and lender. Newer commercial vehicles in good condition often release 85%+. Older or specialist plant may release 50% to 70%. The valuation is independent and forms part of the underwriting.

Who runs sale-and-leaseback in the UK SMB market?

Time Finance, Aldermore, panel asset specialists, and several brokers including FundBiz. Funding Circle and iwoca are not typical sale-and-leaseback providers. The product is asset-specialist rather than mainstream.

Does sale-and-leaseback affect my balance sheet?

Yes. Pre-2026 the structure depended on whether the lease back was finance or operating. Post-1-January-2026 (under amended FRS 102), the leased-back asset returns to the balance sheet as a right-of-use asset with a corresponding lease liability.

Is sale-and-leaseback expensive?

Typical rates from FundBiz panel lenders are 8% to 14% per year on the leased-back facility, with terms 24 to 60 months. More expensive than mainstream secured term lending, less expensive than MCA.

Can I sale-and-leaseback an asset that already has finance against it?

Possible but more complex. The existing finance must be cleared as part of the transaction. Either the new sale-and-leaseback proceeds clear the original finance and release the residual equity, or the original lender writes the refinance directly.

What documentation does sale-and-leaseback need?

Asset details and serial numbers, evidence of clear title (no existing finance), recent statutory accounts, 3 to 6 months of business bank statements, an independent valuation and director ID. The valuation usually adds 5 to 10 working days to the timeline.

Run the matcher

Tell us the asset class, age, indicative value and your use-of-funds plan. We surface the panel sale-and-leaseback specialists most likely to fund and at what advance percentage.

Open sale-and-leaseback matcher →

By Oliver Mackman. Last reviewed 10 May 2026.