A sale-leaseback allows GPU owners to sell their hardware to a financing company and immediately lease it back, converting fixed assets into working capital while maintaining operational control. This is a non-dilutive way to fund growth using existing AI infrastructure.
GPUs valued at current market price minus depreciation curve
Financing company purchases hardware at 60-70% of appraised value
Immediate leaseback with monthly payments over 3-5 years
Purchase option, renewal, or return at lease end
| Term | Typical Range | Notes |
|---|---|---|
| Advance Rate | 60-70% of FMV | Higher for newer hardware |
| Implicit Rate | 12-18% | Based on credit quality and hardware age |
| Lease Term | 36-60 months | Shorter terms for older hardware |
| Purchase Option | $1 buyout or 10% FMV | Depends on lease classification |
| Minimum Deal Size | $5M+ | Some lenders go lower for strategic accounts |
Net cost of capital: $565,600 over 4 years. Effective annual cost: ~7.8% of cash received. Compare to equity dilution or senior debt rates.
Specialized lenders include Macquarie Equipment Finance, Mitsubishi HC Capital, and boutique GPU-focused funds. Traditional equipment finance companies like SMBC and CIT are also active. Selection depends on deal size and credit profile.
Valuation uses a combination of: (1) original purchase price, (2) age/depreciation using entropic decay curves, (3) current secondary market transactions, and (4) forward-looking residual estimates. Newer H100s command higher advance rates than A100s.
Not directly. You must own the hardware outright. However, you can sometimes negotiate a buyout of an existing lease and immediately execute a sale-leaseback with better terms, effectively refinancing.
Most sale-leasebacks include a residual value guarantee. If prices drop significantly, you may owe a deficiency payment at lease end. This is the key risk—you're betting that revenue from the GPUs exceeds total lease payments.
Use our DSCR calculator to see how lease payments impact your debt service coverage.
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