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

Key highlights

• Release cash from vehicles your business already owns outright
• Keep using the same cars, utes and vans with no disruption
• Frees working capital for stock, wages, growth or other assets
• Lease payments may be deductible where vehicles are used for business
• Suits businesses with equity in owned vehicles wanting liquidity

How sale and leaseback works

In a sale and leaseback, your business sells a vehicle it owns to a financier, who pays you a lump sum reflecting the vehicle's value. You then lease that same vehicle back and continue using it in the business as if nothing changed on the road. The cash from the sale is yours to deploy, while the lease payments spread the cost of using the vehicle over an agreed term. It is essentially a way to convert an owned, illiquid asset into working capital without selling it to an outsider or losing access to it. The arrangement can cover a single vehicle or an entire fleet of utes, vans and cars.

Why businesses use it

The main driver is liquidity. Many businesses have real value locked up in vehicles they paid cash for or have nearly paid off, yet that value is doing nothing for cash flow. A sale and leaseback releases it, and the funds can go towards stock, wages, tax bills, new equipment, or simply a healthier cash buffer during a busy or lean period. Because you keep using the vehicles, there is no operational disruption, no downtime, and no need to replace anything. It can also tidy up your balance sheet, moving owned assets into a predictable lease expense. As always, how it affects your tax and accounts is a question for your accountant.

Who sale and leaseback suits

This structure suits established businesses that own vehicles outright, or have significant equity in them, and want to put that value to work. It is popular with operators facing a growth opportunity, a seasonal cash squeeze, or a large upcoming expense who would rather not take on unsecured debt. Fleet-heavy businesses such as trades, couriers, mobile services and regional operators are natural candidates, since even a handful of owned utes or vans can release meaningful cash. If your vehicles still carry finance, a straight refinance may be the better tool; where you own them clear, sale and leaseback is often the cleaner way to access the value.

What affects how much you can release

The amount you can unlock depends on the current market value of the vehicles, their age and condition, and lender appetite. Newer, well-maintained cars, utes and vans in strong demand generally support a higher valuation and better terms. Older or high-kilometre vehicles can still work but may release less. The financier will typically assess the vehicles, confirm you hold clear title, and set a lease structure and term around the funds advanced. Because valuations and lease terms vary between lenders, the figure one financier offers can differ noticeably from another, which is where comparing the market genuinely pays off in the amount you release and the payments you take on.

Eligibility and documents

You will generally need an active Australian ABN and clear ownership of the vehicles you want to sell and lease back. Lenders look at your trading history, credit position, and the vehicles themselves, including proof that title is unencumbered. Full-doc applications backed by financials and bank statements usually attract the sharpest terms, while low-doc options using bank statements and BAS may be available where full accounts are not. You will need registration and ownership records for each vehicle. A quote through Overdrive is a soft credit check only, so assessing whether sale and leaseback frees up useful cash will not affect your credit score, and there is no obligation to go ahead.

Amounts, terms, rates and speed

Sale and leaseback can release value from around $20,000 up to $10 million+ depending on the vehicles involved, from a single ute to a full fleet. Lease terms typically run from 1 to 7 years, structured around the cash you release and your repayment capacity. Rates start from around 6.55% p.a. for strong, asset-backed businesses, with lower-doc profiles or weaker credit priced higher; all figures here are indicative and subject to lender assessment and vehicle valuation. For eligible applicants with clear title and tidy paperwork, the process can move quickly, with funds released within a few days once valuations and documents are settled.

The advantage of comparing 80+ lenders

Valuations, advance amounts and lease terms for sale and leaseback vary widely between financiers, and a single quote rarely reflects the best the market can do. One lender may value your fleet conservatively while another releases considerably more; lease terms and rates differ too. Overdrive lodges one application across more than 80 banks and non-bank lenders, then presents the offers that release the most useful cash on terms you can manage. You deal with one broker, we handle the comparison and paperwork, and your credit file is protected from multiple hard enquiries. That usually means more cash in hand and a lease that genuinely suits your business.

If your business has value tied up in owned vehicles, we can prepare an obligation-free assessment of what a sale and leaseback might release and what the payments would look like. A quote is a soft credit check only, so it will not affect your credit score, and there is no commitment to proceed. Send through your ABN and details of the vehicles you own, and we will compare our lender panel to find the strongest offer. For eligible applicants with clear title, funds can often be released within a few days.