Sale & Leaseback Explained: How It Works, Rates & Who It Suits

Key highlights

• Release cash locked up in trucks you already own outright
• Keep operating the same trucks under a lease with no downtime
• Improve working capital for growth, contracts, tax bills or refinancing
• Lease payments generally deductible as an operating expense, subject to advice
• One application compares 80+ lenders to value your fleet and price the leaseback

How sale and leaseback works

In a sale and leaseback, you sell a truck your business already owns to a financier for an agreed amount, and at the same time enter a lease to keep using that exact truck. The cash from the sale lands in your business, while the truck stays in your yard and on your routes without interruption. You then make regular lease payments over an agreed term, just as you would with any lease. It is a way of converting the equity locked inside your existing trucks into liquid funds, without selling up and replacing them. At the end of the lease the usual options apply, including paying out a residual to take ownership back.

Why operators use it

The core appeal is freeing up capital that is otherwise sitting still in your trucks. Owner-operators and fleets use the released funds to take on a new contract that needs upfront outlay, to buy additional equipment, to smooth out a seasonal cash-flow dip, or to consolidate more expensive debt. Because you keep operating the same trucks, there is no disruption to your freight commitments and no learning curve on new equipment. It can be particularly useful when a business is asset-rich but cash-tight, a common position in transport where a great deal of value is parked in the fleet. The key is making sure the leaseback cost is justified by what the released cash will earn or save.

What the truck can be worth to you

How much you can raise depends on the truck's age, condition, kilometres, make and current market value, along with any finance still owing on it. Trucks you own outright typically release the most, while a truck with an existing loan may still work if there is equity above the payout figure. Lenders will form a view on the truck's value, and this is where they differ, some are more generous or more comfortable with older or specialised trucks than others. A realistic valuation matters, because it drives both the cash you receive and the lease payments that follow. We help you understand what your trucks are likely to be valued at before you commit to anything.

Tax treatment to be aware of

Once the truck is sold and leased back, the lease payments are generally treated as an operating expense and may be deductible to the extent the truck is used to earn income, similar to any lease. However, selling an asset you own can have its own tax consequences, including implications for depreciation already claimed and any balancing adjustment on the sale. GST may also apply to the sale and to the lease payments. These interactions can be significant and depend heavily on your circumstances, so sale and leaseback is one structure where getting advice first genuinely pays off. Treat this as general information only and confirm the full picture with your accountant before you proceed.

Who sale and leaseback suits

This structure suits established operators who own trucks outright, or with strong equity, and need working capital more than they need the asset sitting on the balance sheet. It fits businesses funding growth, bridging a cash-flow gap, or restructuring their finances, and those wanting to redeploy capital into higher-earning uses. It is less suited to operators who are highly geared already, or whose trucks are near the end of their working life and would not attract a worthwhile valuation. Because the benefit hinges on what you do with the released cash versus the ongoing lease cost, it is worth modelling carefully. We help you weigh that trade-off honestly rather than pushing a product.

Eligibility, amounts, rates and timing

Lenders generally look for an active ABN, reasonable credit, clear title or known equity in the trucks, and the capacity to meet the lease payments. Low-doc options may rely on bank statements or BAS where full financials are hard to produce. Funding released can range from around $20,000 up to $10 million and beyond across a fleet, indicative and subject to assessment and valuation. Rates start from around 6.55% p.a. for strong, asset-backed deals, with older trucks or weaker profiles priced higher. For eligible applicants, assessment and settlement can be quick, sometimes within 24 to 48 hours, and enquiring is only a soft credit check that will not affect your score.

Why compare 80+ lenders on valuation and terms

In a sale and leaseback, two things vary most between lenders: how they value your trucks and how they price the lease. A lender that values your fleet more generously and prices the leaseback keenly can leave you materially better off than the first offer you find. Some lenders are wary of older or specialised trucks; others embrace them. By lodging one application, we compare more than 80 banks and non-bank lenders on both valuation and terms, so you extract the fair value of your fleet without overpaying to lease it back. You deal with one dedicated broker who runs the numbers with you and negotiates on your behalf.

If your business is carrying value in trucks you own and could put that cash to better use, a sale and leaseback may be worth exploring. Start with an obligation-free quote: tell us about the trucks and your goals, and we will compare more than 80 lenders on valuation and lease terms tailored to you. The initial enquiry is only a soft credit check, so it will not affect your credit score, and for eligible applicants assessment and settlement can be fast. Reach out today and we will show you what your fleet could release and what it would cost.