Updated September 6, 2026
Quick answer
Equipment refinancing replaces an existing equipment loan with new paper — usually to lower the payment, extend the term, or pull cash out of a machine you have equity in. Two routes: a straight refinance of the current balance, or a sale-leaseback on equipment you own outright. Expect 600+ FICO, 24-72 month terms, and lenders advancing roughly 50-80% of forced liquidation value. Deals of $25,000+ are where the most lenders compete.
Most contractors think about equipment finance once — at purchase. But a machine you already own, or one you are part-way through paying off, is a financeable asset in its own right. Refinancing it is often faster than a new-purchase deal because the equipment already exists and can be inspected.
What Equipment Refinancing Actually Means
Two different transactions get called refinancing, and they are not interchangeable.
A true refinance pays off your existing equipment loan and replaces it with a new agreement, usually at a longer term or lower rate. The new lender pays off the old lien holder directly and files its own UCC-1. This is what you want if the payment is straining cash flow.
A sale-leaseback applies to equipment you own free and clear. You sell the machine to the lender and immediately finance it back, walking away with cash and a monthly payment. This is what you want if the goal is liquidity rather than payment relief.
When Refinancing Makes Sense
The payment is too aggressive. A 24-month term on a machine with ten years of life left is a cash-flow problem, not a credit problem. Stretching to 48 or 60 months can materially change your monthly position.
Your credit or revenue has improved. If you took the original paper at 620 FICO and eighteen months in business, and you are now at 690 and three years, you are a materially different applicant.
You need working capital and own hard assets. Equipment-secured money is almost always cheaper than an unsecured product or a merchant cash advance. If you are considering a daily-debit product, refinance the iron instead.
You are consolidating. Three machines on three payments to three lenders can sometimes become one payment on one term.
When It Does Not Make Sense
If your current loan carries a heavy prepayment penalty, the savings can be swallowed whole — check that first. If the machine is near the end of its useful life, lenders will not extend a term beyond what the collateral supports. And if you are refinancing to cover recurring operating losses rather than to fix a structural cash-flow mismatch, you are converting an asset into runway, which usually ends badly.
How Much You Can Get
Lenders advance against forced liquidation value — what the machine would fetch at auction, not what you paid. As a rough guide, expect an advance of 50-80% of FLV, with newer, serialised, brand-name iron at the top of that range and older or specialised machines at the bottom. Above roughly $500,000 expect a formal third-party appraisal rather than a desktop valuation.
| Factor | Helps | Hurts |
|---|---|---|
| Age and hours | Under 7 years, documented hours | 10+ years, no service history |
| Brand | Cat, Komatsu, Deere, Volvo | Orphan or import brands |
| Title status | Clear title or single payoff | Multiple liens, disputed title |
| Specialisation | General-purpose iron | Single-use custom machines |
What You Need to Apply
The current payoff letter from your existing lender, a copy of the original contract, the machine details including make, model, year, serial number and hours, three to six months of business bank statements, and proof of insurance. If the equipment is titled, the title itself. Complete paperwork is the difference between funding this week and funding in three — see what lenders look at for approval.
How Long It Takes
A straight refinance under $250,000 with a clean payoff typically decides in 1-3 business days and funds within a week. The variable is almost always the existing lender — payoff letters can take days to produce. Sale-leasebacks and anything requiring a physical appraisal add one to two weeks. See how fast equipment financing is approved.
Next Step
Get matched with lenders that refinance equipment. See also equipment sale-leaseback financing for machines you own outright, and equipment financing requirements.
See our equipment financing overview for requirements, rates and the application path. An asset loan pays for iron, not for the weeks before a customer pays. Where that is the real gap, working capital loans fit better.
Frequently Asked Questions
Can you refinance an equipment loan?
Yes. A new lender pays off your existing lien holder and writes new paper, usually at a longer term or lower rate. It is a common way to fix a payment that was structured too aggressively at purchase.
What is the difference between equipment refinancing and a sale-leaseback?
A refinance replaces an existing loan on equipment you are still paying off. A sale-leaseback applies to equipment you own free and clear: you sell it to the lender and finance it back, taking cash out.
How much can I borrow against equipment I already own?
Lenders advance against forced liquidation value, typically 50-80% of it. Newer, serialised, brand-name machines sit at the top of that range; older or highly specialised equipment at the bottom.
What credit score is needed to refinance equipment?
Most lenders look for 600+ FICO. Because the loan is secured by the machine, credit carries less weight than it would on an unsecured product, though it still affects rate and term.
Can I refinance equipment with an existing lien on it?
Yes, that is the normal case. The new lender pays off the current lien holder directly. You will need a payoff letter, and multiple or disputed liens will slow or block the deal.
How long does equipment refinancing take?
A straight refinance under $250,000 with a clean payoff usually decides in 1-3 business days and funds within a week. The delay is almost always waiting on the existing lender's payoff letter.
Is it worth refinancing if my loan has a prepayment penalty?
Check the penalty before anything else. A heavy prepayment charge, especially one calculated as full remaining interest, can wipe out the savings entirely.
What documents do I need to refinance equipment?
The current payoff letter, the original contract, full machine details including serial number and hours, three to six months of business bank statements, proof of insurance, and the title if the equipment is titled.
Can I refinance equipment to get working capital?
Yes, and equipment-secured money is normally far cheaper than an unsecured product or a merchant cash advance. It is a sound move to fix a structural cash-flow mismatch, and a poor one to cover recurring operating losses.