Businesses can often build up considerable equity in their existing equipment. Refinancing allows them to leverage this source of equity for working capital, debt consolidation or even business expansion. By consolidating multiple loans into a single and seamless loan, companies can drastically reduce their monthly expenses while also reducing the number of accounts they manage.
This also applies to equipment that has already been paid in full. If the collateral is in good condition and still has value, a sale/leaseback may be used. With a sale/leaseback, the equipment is essentially sold to the leasing company and in turn, leased back to the customer.