Cash-Out Refinance
Cash-out refinance on oilfield rigs, frac pumps, compressors, and service units. Keep title, pull working capital. Minimum $50k. Oilfield lender review after the complete file.
Equity in a paid-off workover rig is equity that is not paying your crew in the slow weeks between contracts. A cash-out refinance puts a new lien on equipment you already own, draws out the available equity as cash, and leaves the iron exactly where it is: in your yard, on location, or ready to mobilize. You come out with working capital and a manageable monthly payment on an asset that was already carrying zero debt.
We write cash-out refinances on most oilfield service equipment: rigs, compressor packages, frac pumps, cementing units, pump trucks, hot oil trucks, and specialty trailers. The asset needs to be owned outright or have enough equity above an existing payoff to make the cash-out meaningful. Minimum transaction is $50,000. Larger assets with documented appraisals can support substantially higher draws. Closing follows field-ticket and lien review after the complete file.
How a Cash-Out Refinance on Oilfield Equipment Works
The process has three steps. First, the equipment is appraised or valued based on market data and condition. Second, the lender advances a loan amount based on a percentage of that value, typically 70% to 100% of liquidation value for clean, well-maintained iron. Third, any existing lien is paid off from the proceeds and the remaining balance comes to you as cash.
The result is a first-lien loan on the equipment, a fixed monthly payment, and cash in the business. The term runs 24 to 60 months depending on asset type, condition, and credit profile. Rate depends on the deal. The equipment title stays in your name throughout.
If the equipment already has an existing loan with a remaining balance, the cash-out is the spread between the new loan amount and the payoff. For example: a compressor package appraised at $400,000 with a $120,000 payoff might generate a $280,000 to $360,000 new loan, pay off the $120,000 balance, and put the remaining proceeds to work. For equipment owned free and clear, the full loan amount is available as cash.
What Supports the Best Cash-Out Values
Appraisal drives proceeds. Iron that is well-documented, recently serviced, and in an active secondary market appraises at or near top-of-range. High-hour equipment without service records, units with unreported damage, or specialty configurations with limited resale markets appraise lower. You can influence the outcome by having documentation ready: recent service invoices, engine hours, any third-party inspections, and photos of the current condition.
Asset classes with the deepest secondary markets tend to generate the highest cash-out percentages. Well-maintained workover rigs running about $300k to $600k, serviceable gas compression units, and late-model oilfield trucks command strong lender interest because recovery in default is straightforward. Highly custom or obsolete equipment is harder.
Equipment located in active basins appraises better than equipment sitting in a region with no current drilling activity. A workover rig in Midland, TX is easier to lend against than the same rig parked in a basin that has been quiet for several years. Geography affects liquidation math, and honest lenders factor it in.
Related Capital Structures
A cash-out refinance and an equipment sale-leaseback both extract equity from owned iron. The difference is ownership. A cash-out refi keeps the equipment on your balance sheet as an asset. A sale-leaseback transfers ownership to the lender and replaces the asset with a lease obligation. Which one fits depends on your balance sheet goals, bonding situation, and tax picture.
If you need capital for a specific short-term purpose, a working capital loan may be faster and simpler, without requiring a full equipment appraisal. Working capital lines are unsecured or lightly secured and size to revenue rather than asset value. The trade-off is that working capital products typically carry higher rates and shorter terms than an equipment-secured cash-out.
Independent oil and gas producers sometimes use cash-out refinancing on production equipment, surface facilities, or compressor packages to fund new well completions when commodity prices make development attractive but cash flow is timing-sensitive. The existing surface iron can generate the capital for the wellhead investment.
Questions before you send the file.
Straight answers about cash-out refinance, documentation, timing, and equipment eligibility.
Can I cash-out refinance equipment that still has an existing loan on it?
Yes, as long as there is equity above the existing payoff to make it worth doing. The new loan pays off the current lender at close, and any proceeds above that payoff come to you. If the current loan balance is close to the equipment's value, there may not be much equity to extract, but the refi can still lower your payment or extend the term.
Is there a minimum time I need to have owned the equipment before doing a cash-out?
No fixed waiting period. What matters is that the equipment has a documentable value above any outstanding lien. Operators who bought equipment at market and want to pull capital out six months in can sometimes qualify, provided the asset value supports the proceeds and the credit profile is solid.
How does the appraisal process work, and who pays for it?
We typically order an appraisal from a qualified third-party appraiser familiar with oilfield equipment. The cost is usually passed to the borrower as a closing cost. Timelines vary, but most equipment appraisals complete in a few business days if the unit is accessible. Remote or field-located equipment may take slightly longer. The appraisal cost is almost always worth it relative to the capital you receive.
What can I use the cash-out proceeds for?
Anything legal and business-related. Payroll, consumables, down payments on new equipment, insurance, bonding costs, contract mobilization expenses, or just building the bank balance for the next slow period. We do not restrict use of proceeds on equipment cash-outs.
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Get terms on Cash-Out Refinance.
Send the asset details, seller quote, and target timing. We will review the request and tell you what documentation is needed next.