Agricultural Finance Guide

Sale & Leaseback for Agricultural Equipment

Release capital tied up in owned farm machinery without interrupting operations.

What Is Agricultural Sale & Leaseback?

Sale and leaseback is a financing technique that allows farming businesses to convert capital tied up in owned farm machinery into working cash, while retaining full operational use of that equipment. The process involves selling the asset to a specialist finance company at its current market value, then immediately entering a lease agreement to continue using it in exchange for fixed monthly rental payments.

For farming businesses, this can be a powerful tool for raising liquidity during challenging trading periods, funding new machinery or land purchases, or restructuring an overleveraged balance sheet - without selling equipment that is operationally critical.

The Sale & Leaseback Process

Asset Identification

Identify the equipment to be included. High-value, identifiable assets with clear market values work best: tractors, combines, grain dryers, irrigation systems.

Valuation

The lender instructs an independent or in-house valuer to assess the current market value. Advance rates of 70–90% of valuation are typical.

Offer & Acceptance

Lender issues a formal offer setting out the cash advance, monthly rental, term, and end-of-term options. You review and accept.

Completion

Legal title transfers to the lender. The cash advance is credited to your account. The lease commences immediately, and you continue using the equipment as before.

When Does Sale & Leaseback Make Sense?

Sale and leaseback suits farming businesses that:

Own high-value machinery outright or with low residual HP balances
Need working capital to fund a seasonal purchase, land opportunity, or business expansion
Want to improve cash flow without taking on additional unsecured debt
Have been declined for an unsecured loan or overdraft increase
Are restructuring finance ahead of a bank review or refinancing

It is less suitable where the equipment has very low residual value, where existing HP or lease agreements encumber the asset, or where the lease rental would create an unmanageable monthly commitment relative to farm income.

Get a quote 0204 6211776

Same working day

Get terms for your own case

The figures on this page are indicative. Send us your scenario and we will come back the same working day with options from our panel of 130+ lenders.

0204 6211776

Whole of market · 130+ lenders · FCA 814533 · Same working day response

FAQs

Frequently asked questions

What is sale and leaseback for agricultural equipment?

Sale and leaseback involves selling existing owned farm machinery to a finance company and immediately leasing it back under a fixed-term agreement. You receive a lump sum of cash and retain full use of the equipment.

How much cash can I release through a sale and leaseback?

Typically 70–90% of the current market value of the equipment, depending on the asset's age, condition and the lender's valuation. A specialist agricultural valuer may be instructed.

Does sale and leaseback affect my ability to get other finance?

The lease liability will appear on your balance sheet under IFRS 16, which may affect banking covenants. Always discuss with your accountant and bank before proceeding.

What types of farm equipment are suitable for sale and leaseback?

Most high-value, identifiable farm assets are suitable: tractors, combines, specialist harvesting equipment, grain dryers, and irrigation systems. Land, buildings and livestock are not eligible.

Can I buy back the equipment at the end of the leaseback?

Some structures allow a nominal purchase option at the end of the primary term. Others require the equipment to be handed back or the agreement extended. Terms vary by lender.

Agricultural Finance Glossary Refinancing Agricultural Equipment Agricultural Finance Rates Agricultural Finance for Limited Companies Young Farmer Finance Agricultural Finance for New Farmers & Start-Ups

Asset finance for business purposes is not regulated by the FCA. Rates shown are indicative as at October 2026 and depend on credit profile, term, asset and deposit. We act as a credit broker, not a lender. Your asset may be repossessed if you do not keep up repayments.