Refinancing equipment you already own
Yes, you can finance equipment you already own, and you can refinance equipment you are already paying off. There are a few different ways to do it and they are not interchangeable. One changes who owns the machine, one does not, and one deals with a payment falling due at the end of a contract you already have. Which one suits you depends on the equipment, its age, and what you are trying to free up. It is a short conversation rather than a form.
Why refinance equipment at all
Most businesses come to this for one of two reasons. Either there is capital sitting inside machinery that is doing nothing for the business, or there is a payment coming at the end of a contract and the cash to clear it would be better used elsewhere.
Refinancing turns an asset you already have into working capital, or it turns a single large payment into a manageable one. It does not conjure money out of nothing, and it is not the right answer for every business. Someone from our team will tell you if it is not.
Sale and leaseback
Also called sale and rent back. The funder buys the equipment from you and rents it back to you for a fixed monthly repayment. You keep using the machine exactly as before. What changes is that ownership passes to the funder for the term.
Because the funder is buying the equipment and renting it to you, GST applies to your repayments. How that sits in your books is a question for your accountant, and we will not attempt it for you.
Sale and buyback
This one looks similar and works differently. The funder takes security over the equipment for the term of the loan rather than buying it. Ownership stays with you throughout.
If keeping title to the machine matters to you, this is the structure to ask about. It is worth being clear which of the two you are being offered, because the difference is easy to miss in conversation and it affects both ownership and the GST position on your repayments.
Refinancing a balloon or residual
If your existing contract ends with a balloon or residual payment, that amount can often be refinanced rather than paid out in one go. You keep the equipment and the payment becomes a new term.
Timing matters more than people expect. See what to do when your balloon payment is due for when to start and what your options are.
How old can the equipment be
Age limits differ by asset, because a machine that works hard for fifteen years and one that does not are treated differently. Printing equipment is a useful example: typically the equipment cannot already be seven years old when the term starts, and cannot be older than twelve by the time the term ends.
Other assets carry their own limits. If you tell us what the machine is and roughly when it was bought, we can tell you quickly whether it is in range.
Which lender do I go to
You do not. Someone from our team looks at the equipment and your situation, compares lenders, and arranges it. You deal with one contact rather than repeating yourself to several. Figures are ex GST, and nothing is settled until a funder has assessed it.
Common questions
Can I refinance equipment I own outright?
Yes. That is what sale and leaseback and sale and buyback are for. Which one suits depends on whether you want to keep ownership during the term.
Do I keep using the equipment?
Yes. The machine stays where it is and you keep working with it. What changes is how it is financed.
Is there GST on the repayments?
On a sale and leaseback the funder buys the equipment and rents it back, so GST applies to the repayments. A sale and buyback works differently because ownership stays with you. Your accountant is the right person to confirm how either sits in your books.
When should I look at refinancing a balloon?
About twelve months before it falls due is a good time to start, then again at six months and three. Earlier gives you more room.
How old is too old?
It depends on the asset. For printing equipment, typically it cannot already be seven years old at the start of the term or older than twelve by the end. Tell us what the machine is and we can check.
Ecolease arranges your finance. This quote is indicative, and any offer is subject to credit assessment and the lender's approval.
Talk to us about refinancing your equipment
Tell us what the machine is and roughly when you bought it. Someone from our team takes it from there.
Start the conversation