← All guides

How a sale-leaseback works

Published October 5, 2026

A sale-leaseback (SLB) lets a business turn equipment it already owns into working capital. You sell the equipment to a lender or lessor, then lease it straight back and keep operating it without interruption.

Typical steps

1. The lender values the equipment, often with an appraisal or recent comparable sales.
2. You sell it to the lender at an agreed price and receive the proceeds.
3. You sign a lease and make regular payments for the term.
4. At the end of the term you may buy the equipment back, renew, or return it, depending on the agreement.

When it can make sense

• You own equipment free and clear (or with a small balance) and need cash for growth, inventory or payroll.
• You want to refinance existing debt without disturbing day-to-day operations.
• Your equipment holds its value well and is easy to resell.

Points to check

• The valuation, since the lender’s price may differ from what you expect.
• The total cost of the lease against other sources of capital.
• Any existing liens, which usually need to be paid out at closing.
• Tax and accounting treatment, which you should confirm with your accountant.