Compare finance types
Equipment loan vs Sale and leaseback: which is right for your business?
The main difference between a equipment loan and a sale and leaseback is how they are secured and repaid: a equipment loan suits any business buying income-producing equipment, while a sale and leaseback suits asset-rich businesses needing working capital for growth, a contract or a tax liability.
Equipment loan vs Sale and leaseback at a glance
| Equipment loan | Sale and leaseback | |
|---|---|---|
| What it is | An equipment loan is a secured business loan used to buy machinery, vehicles or technology, with the equipment itself as security and fixed repayments over 1 to 7 years. It covers new and used assets from dealers or private sellers. | Sale and leaseback is an arrangement where you sell equipment your business already owns to a financier for its market value and immediately lease or finance it back, releasing cash while keeping the asset in daily use. It converts equity locked in plant into working capital. |
| Amount | $5,000 – $5,000,000 | $20,000 – $2,000,000 |
| Term | 12–84 months | 12–60 months |
| Indicative rate | 6.9% – 16% p.a. | 8.5% – 18% p.a. |
| Rate type | Fixed | Fixed |
| Security | Secured by the asset | Secured by the asset |
| Repayments | Monthly | Monthly |
| Typical speed | Same day to 48 hours for low-doc | 3–10 business days including valuation |
| Best for | Any business buying income-producing equipment | Asset-rich businesses needing working capital for growth, a contract or a tax liability |
| Consider the other if | General working capital with no asset purchase | Older, low-value or specialised equipment with a thin resale market |
| Tax | Interest and depreciation are generally deductible. | A sale may trigger a balancing adjustment against the asset’s written-down value. Get accounting advice before proceeding. |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
When to choose a equipment loan
A equipment loan is usually the better fit for any business buying income-producing equipment. Its main advantages are secured pricing, low-doc pathways for established businesses, new, used and private-sale assets. Consider the alternative if general working capital with no asset purchase.
When to choose a sale and leaseback
A sale and leaseback is usually the better fit for asset-rich businesses needing working capital for growth, a contract or a tax liability. Its main advantages are releases capital without losing the use of the asset, priced as secured finance, not unsecured lending, no property security required. Consider the alternative if older, low-value or specialised equipment with a thin resale market.
Equipment loan
An equipment loan is a secured business loan used to buy machinery, vehicles or technology, with the equipment itself as security and fixed repayments over 1 to 7 years. It covers new and used assets from dealers or private sellers.
Sale and leaseback
Sale and leaseback is an arrangement where you sell equipment your business already owns to a financier for its market value and immediately lease or finance it back, releasing cash while keeping the asset in daily use. It converts equity locked in plant into working capital.