What Is Sale & Leaseback?
Sale and leaseback (S&LB) allows a farming business to sell an asset it already owns (farm equipment, machinery, or in some cases fixed infrastructure) to a finance company, and immediately lease it back for continued use. The business receives a lump sum of capital while retaining use of the asset and paying a regular lease rental.
For farm businesses, sale and leaseback is most commonly used for tractors, combines and other major equipment, but specialist lenders also consider grain stores, buildings and other fixed infrastructure.
How Sale & Leaseback Works
Valuation
The lender assesses the current market value of the asset. For equipment, this is typically based on current trade guides; for buildings, a specification or desktop valuation.
Sale
You sell the asset to the finance company at agreed value. The funds are paid to you - releasing cash from the asset.
Leaseback
You immediately lease the asset back under a finance lease for a fixed term, paying regular rentals. At the end of the term, you can usually repurchase for a nominal fee or extend.
Sale & Leaseback Rates - October 2026
| Asset Type | Rate From | Typical LTV | Term |
|---|---|---|---|
| Farm equipment (tractor, combine) | 6.2% APR | Up to 80% of value | 2–5 years |
| Grain store / building | 6.4% APR | Up to 70% of value | 5–10 years |
| Mixed equipment package | 6.5% APR | Up to 75% of value | 3–7 years |
When Does Sale & Leaseback Make Sense?
S&LB suits businesses that own high-value assets outright and need to release capital - for reinvestment, cash flow management, buying additional land or funding business growth. It is not suited to businesses with significant borrowing already secured on the same assets.