Sale-Leaseback

You have trucks on the road running contracts every day, and you have equity sitting in those trucks doing nothing for your cash position. A sale-leaseback is how that equity becomes working capital without parking a single unit. You sell the equipment to a financing company at its current market value, then immediately lease it back under a structured payment. The truck never leaves your yard. The driver never loses a route. The capital shows up in your account and you can put it to work: buying more containers, making payroll during a slow billing cycle, or making the down payment on a new truck that wins another contract.

We arrange sale-leasebacks on packer trucks, front loaders, rear loaders, roll-off trucks, and other refuse equipment for private waste haulers and regional operators who have built equity in their fleet over years of operation. The minimum transaction we work on is $50,000, and sale-leasebacks tend to make the most sense on equipment with significant equity and a few years of remaining useful life.

The transaction has three steps that can close in a single day once the underwriting is complete. First, a lender purchases your equipment at an agreed value, which is typically based on an appraisal, a book value reference, or the lender's collateral guidelines for that equipment type and age. Second, you sign a lease agreement that governs the terms under which you continue using the equipment. Third, the lender wires the purchase price to you, minus any costs of the transaction, and you begin making lease payments on the agreed schedule.

Lease terms on sale-leasebacks typically run 24 to 60 months. The payment is calculated from the equipment value, the residual (if any), and the money factor. At the end of the lease, depending on how the deal is structured, you can buy the equipment back at a stated residual, walk away and return it, or renew. Most refuse operators structure a buyback so they retain the equipment long-term, because the route asset is worth more as an operating unit than at auction value.

• Cash arrives at closing without selling or losing the truck
• Monthly lease payment replaces the equity that was locked up
• Equipment stays on the route without interruption
• End-of-term buyback option preserves long-term ownership
• No new debt on balance sheet (depending on lease structure)

Sale-leasebacks suit operators in specific situations. If you own trucks outright or with small remaining balances, and you need capital to bid on a new contract that requires more equipment, a sale-leaseback can fund the down payment or the full purchase on the next unit without a bank line of credit. If you are trying to smooth out a cash flow dip between contract cycles, the equity in your fleet is accessible without the paperwork and credit scrutiny of an unsecured loan.

Operators preparing to expand into a new geographic market sometimes find that a sale-leaseback on their existing fleet funds the entry better than any other source. You are not taking on new investors, not drawing on a line of credit at a high rate, and not waiting for accounts receivable to clear. The capital is already in the metal; a sale-leaseback just extracts it on a schedule you can service from the route income.

That said, a sale-leaseback is not a fit for every situation. If the equipment is old enough that the residual value is low, the capital you extract may not justify the lease obligation. We will do the math plainly before recommending this structure. If a cash-out refinance or a new loan makes more sense, we will say so.

Refuse trucks hold value relatively well compared to many commercial vehicles. The specialized nature of the equipment limits the secondary market to a defined buyer pool, but that pool is active because the cost of a new unit is high and lead times on new production can run months. A well-maintained automated side loader or front loader with five to eight years of life remaining can generate substantial sale-leaseback proceeds.

Equipment values are highest on units with documented maintenance records, no major frame damage, functional hydraulics, and full operational status. We work with appraisers and use current market data to determine a fair transaction value. We are not looking to low-ball your equipment; the sale price determines how much capital you walk away with at closing, so it is in our interest to get that number right.

Operators who have acquired used garbage trucks at favorable prices and maintained them well often find that the spread between their purchase price and current market value creates a meaningful sale-leaseback opportunity. If you bought a truck at auction two years ago for considerably less than replacement cost, that gap is the equity you can extract.

Tell us about the trucks you own and what you need the capital for. We will put together a sale-leaseback proposal that shows the proceeds, the lease payment, and the total cost over the term. If comparing it against a refuse truck loan on new equipment helps clarify the decision, we can run both side by side. Many operators serving municipal sanitation departments find that a sale-leaseback is the fastest path to bid capital when a contract comes up for re-award.