Finance question
What happens to financed gear if I sell my business?
The finance is either paid out or transferred as part of the sale. Because the gear secures a loan, the debt has to be dealt with before the asset changes hands clean. Usually the sale proceeds clear the payout figure, or the buyer takes on the finance. We help work the payout maths into the deal so nothing is left hanging.
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The short answer
Clear the finance before the gear changes hands
When equipment is financed, the lender holds security over it until the loan is settled. So when you sell the business, that gear cannot simply pass to the buyer with the debt ignored. The finance has to be paid out or formally taken over, so the asset transfers clean and the lender's interest is released.
The most common route is paying it out from the sale. You request a payout figure, and the proceeds of the sale clear the loan at settlement, releasing the security so the buyer receives the equipment unencumbered. This keeps things simple and leaves nothing tied to your name once the deal is done.
Sometimes the buyer takes on the finance instead, subject to the lender assessing them and agreeing to the transfer. That depends on the buyer's profile and the lender's policy, so it is not automatic. Either way, the payout figure is the anchor number, and it needs to be built into the sale price and structure from the start.
How it usually plays out
The routes for financed gear in a sale.
Paid out at settlement
Sale proceeds clear the payout figure and release the security.
Transferred to the buyer
The buyer takes on the finance, subject to lender assessment.
Built into the price
The payout figure is factored into the sale structure upfront.
Security released
Once settled, the lender's interest over the gear is cleared.
Why this needs planning early
Clean transfer
The buyer wants the gear free of any lender's security.
Nothing left hanging
Clearing the payout means no finance stays tied to your name.
A broker can structure it
We get the payout figure and work it into the sale terms.
A real example
An owner sells a workshop with a financed $50,000 hoist still on the books. The broker gets the payout figure, and at settlement the sale proceeds clear the loan, releasing the security so the buyer takes the hoist clean. Nothing stays tied to the seller. Illustrative only.
Common questions
Frequently asked questions
Can I just hand the gear to the buyer?
Not while it is financed. The loan has to be paid out or formally transferred so the lender's security is released and the gear passes clean.
Can the buyer take over my finance?
Sometimes, if the lender assesses the buyer and agrees to the transfer. It depends on their profile and the lender's policy, so it is not automatic.
What is the payout figure?
It is the amount to clear the loan in full on a set date. Request it early, because it anchors how the financed gear is handled in the sale.
Can you help work this into the sale?
Yes. We get the payout figure and help build it into the price and structure, so the finance is dealt with cleanly at settlement.