Asset refinance allows a business to unlock cash from equipment it already owns.
Instead of relying on unsecured borrowing or overdrafts, a company can use the value of existing assets such as machinery, vehicles, or plans to raise new funding.
This means you can turn tied-up equity into working capital while continuing to use the equipment that drives your operations.
How Refinance Works – Overview
Asset refinance is a straightforward process:
- The business identifies an asset that holds value.
- A finance provider assesses the asset and agrees a suitable funding amount.
- Capital is released into the business.
- The company repays the finance in fixed monthly instalments over an agreed term.
- Ownership returns to the business at the end of the agreement.
In essence, it allows you to use the strength of your balance sheet to generate liquidity, without business disruption.
Who is Asset Refinancing for?
Asset refinance is particularly suitable for:
- SMEs looking to improve cashflow or fund growth
- Mid-sized and large corporates with extensive equipment or vehicle fleets
- Manufacturing, engineering, construction, logistics, agriculture, and production businesses
- Companies with valuable machinery or equipment tied up on the balance sheet
- Businesses seeking a more flexible alternative to traditional lending
Whether the asset is owned outright or still under an existing finance agreement, refinancing can provide fast and efficient access to capital.
Which Assets can be Refinanced?
A wide range of assets may qualify, including:
- Plant and machinery
- CNC machines
- Commercial vehicles and fleets
- Agricultural machinery
- Construction equipment
- Engineering tools
- Printing and production machinery
- Specialist or high-value equipment
If the asset holds value and plays a role in your operations, it may be suitable for refinance.
The benefits and advantages of Asset Refinance
Asset refinance can be particularly valuable for businesses that are asset-rich but cash-poor, providing a strategic way to borrow against balance sheet assets.
1. Free up working capital
Unlock equity tied up in equipment and redirect it into growth, operational needs, or investment opportunities.
2. No full ownership required
Even if an asset is still under finance, its remaining equity may be used to secure additional funding.
3. Flexibility in asset selection
Choose which assets to refinance based on operational importance and financial goals.
4. Better loan terms
Refinancing may offer improved terms, such as lower interest rates or more favourable repayment structures.
5. Flexible repayment terms
Repayments can be spread over up to five years, with fixed monthly costs to support predictable budgeting depending on the age of the asset.
6. Retain essential equipment
Continue using your machinery, vehicles, or equipment throughout the agreement, with ownership returning to you at the end.
A practical example: how refinance helps
Imagine your manufacturing business owns a CNC machining tool that is central to your production line. You want to expand or upgrade operations but don’t want to disrupt cashflow with an unsecured loan.
By refinancing the CNC machine:
- You unlock a cash lump sum tied up in the asset.
- You continue using the machine as normal.
- You make fixed monthly repayments over the agreed term.
- Ownership returns to you once the agreement ends.
This allows you to reinvest without halting production or straining liquidity.
What to consider
As with any secured finance product, important points to note include:
- Finance is secured against the asset, meaning it may be repossessed if repayments are not maintained.
- Lending is subject to status, eligibility, and credit criteria.
- Terms and conditions apply, and applications may be declined.
It’s important to ensure asset refinance aligns with your long-term plans and operational needs.
Is Asset Refinance right for your business?
Asset refinancing may be a strong option if your business:
- Needs a rapid cash injection
- Wants to improve cashflow
- Has valuable assets tied up on the balance sheet
- Is planning to expand or invest in new equipment
- Wants to restructure or reduce monthly repayments
- Prefers alternatives to unsecured or traditional lending
If these challenges sound familiar, asset refinance could provide the liquidity and flexibility your business needs.
Let’s explore your options
Every business and every asset is different.
If you’d like to understand whether asset refinance could support your goals, BFS are happy to talk through the options and explore what’s most suitable for your situation.
Feel free to get in touch for an informal conversation about your refinancing options.
