Asset finance

Asset refinance: release cash from equipment, vehicles and machinery you own

Raise working capital against vans, plant and machinery you already own and keep using them. How asset refinance works, the structures and what lenders value.

Get Instant Quotes Discuss Your Requirement

Explore funding options Prefer a quick call back? Leave your number

No obligation discussion
Access to 300+ lenders
Free to enquire

“A super responsive broker who quickly diagnoses the needs of the client.”
Business owner, ongoing funding strategy

Amount: From £10,000 to £10 millionLarger amounts through secured, property and asset-based finance
Security: Secured or unsecuredOptions compared for your case
Suitable businesses: Sole traders to limited companiesPartnerships and LLPs too
Lender panel: 300+ lendersWhole-of-market search

In short

How much you can raise depends mainly on what the asset would sell for today, not what you paid for it.

Vans, HGVs, plant and machinery with an active resale market attract the best advances, while software and fit-outs are hard to refinance. If the asset is still on finance, the new lender can settle the old agreement and release the remaining equity. Lenders also check affordability and credit history.

About asset refinance

Asset refinance releases cash tied up in equipment, vehicles or machinery your business already owns.

A lender advances funds against the asset's value and you repay over an agreed term, while the asset stays on site and keeps working. It suits owner-managed businesses that bought kit outright, or have nearly paid it off, and now need working capital without selling the equipment they rely on.

Smart Funding Solutions searches its lender panel for refinance providers that understand your asset type, from HGVs to CNC machines. Asset refinance is one of the options on our asset finance hub.

Funding needs

What businesses use the funds for

Topping up working capital or smoothing seasonal cash flow.
Buying stock, taking on a larger contract or expanding premises.
Consolidating more expensive short-term borrowing.
Paying a tax bill or other large one-off cost.

Quick enquiry

Prefer a quick call back?

Not ready for the full application? Leave a few details and a broker will call you to talk it through. It is free, with no obligation.

One short conversation, no paperwork yet
Whole-of-market search across 300+ lenders
Or call us on 01244 267694

A transaction we arranged

£145,000

The funding the business needed was already sitting on the factory floor.

Rather than another expensive short-term unsecured loan, a manufacturer released capital from machinery it already owned.

Read the transaction

Sector: Manufacturing
Structure: Asset refinance
Outcome: Completed

How asset refinance works

Valuationthe lender assesses the asset's current market value, taking into account its type, age, condition and, for vehicles, mileage.
Offerthe lender offers to advance a proportion of that value, depending on the asset, your business and your credit profile.
Agreementthe refinance is set up under one of the structures below.
Repaymentyou repay in fixed instalments over the agreed term. Under a hire purchase structure, ownership returns to you after the final payment.

Refinancing assets still on finance

If an asset is partly paid off, a lender may settle the existing agreement and set up a new one, releasing the equity as cash. Equity is simply the asset's value minus the settlement figure.

Illustrative example only — not a quote or offer of finance.

A machine valued at £60,000 with £20,000 still to settle has £40,000 of equity; the lender then advances a proportion of the value, pays off the old agreement from it, and releases the rest to you.

What assets can be refinanced?

Commercial vehicles, vans, HGVs and cars; see our guide to business vehicle finance.
Plant and construction equipment.
Manufacturing and engineering machinery.
Agricultural equipment.
Some specialist and technical equipment.

Assets that hold their value and have an active resale market are the easiest to refinance. Items with little resale value, such as software or fit-outs, are harder.

Alternatives to asset refinance

If your assets are not suitable, other options include invoice finance, a revolving credit facility, an unsecured loan or a secured business loan against property. To acquire new equipment rather than release cash from existing items, standard hire purchase or leasing is the better route.

Underwriting

What lenders look at

The asset's value, age, condition and resale market.

Any outstanding finance and its settlement figure.

Trading history, accounts and bank statements to show affordability.

Business and director credit history.

What the funds are for and how repayments will be met.

Because the finance is secured on the asset, lenders may be more flexible than with unsecured borrowing, though approval is always the lender's decision. Directors may still be asked for a personal guarantee.

Checklist

Documents to have ready

Proof of ownership, such as the original purchase invoice or V5C for vehicles.
An asset list with make, model, year and serial or registration numbers.
Settlement letters for any finance still outstanding.
Recent bank statements and latest accounts.

Advantages and disadvantages

Advantages	Disadvantages
Releases cash without selling equipment you need	It is new borrowing that costs interest and fees
Fixed repayments agreed upfront	The asset can be repossessed if you fall behind
The asset provides security, widening the choice of lenders	You cannot sell the asset freely until the agreement is settled
Repayments can often be set weekly, monthly or quarterly	Assets that lose value quickly attract lower advances

Side by side

Compare your options

How the main business finance structures work. Lenders set their own terms, so treat this as a guide to the questions to ask.

Option	How you repay	Security	Often used for
Unsecured business loan	Fixed instalments, usually monthly	No charge over assets; a personal guarantee is usually required	Growth, stock, tax bills and cash flow
Secured business loan	Fixed instalments, often over a longer term	A charge over property or other assets	Larger sums, property and refinancing
Revolving credit facility	Interest on what you draw; repay and redraw	Varies by lender and case	Recurring or uneven cash flow gaps
Merchant cash advance	A share of future card takings	No charge over assets	Card-taking businesses with uneven months
Asset finance	Regular payments over the life of the asset	The asset being financed	Equipment, vehicles and machinery
Invoice finance	Settled as customers pay their invoices	Your unpaid invoices	Businesses waiting on customer payment

General information only. Every lender has its own criteria, and all finance is subject to status.

Refinance structures compared

Structure	How it works	Ownership
Sale and hire purchase back	The lender buys the asset from you and you buy it back in instalments	Returns to you after the final payment
Sale and leaseback	The lender buys the asset and leases it back to you	Stays with the lender; end-of-term options vary
Loan secured on the asset	You keep ownership and the lender takes security over the asset	Stays with you, subject to the lender's charge

The broker’s view

How we arrange asset refinance

Tell us which assets you own, roughly what they are worth, any finance outstanding and what the funds are for. We approach lenders that value that type of asset, compare the advances and terms offered, and go through them with you. Once a lender has everything it needs, decisions can come within a few working days. Before funds are released, the lender checks proof of ownership and any settlement figures, pays off existing finance direct to the old lender and sends the balance to your business account. You can explore funding options with your asset list to hand.

FAQs

Questions clients ask

Can sole traders use asset refinancing?

Yes, sole traders and partnerships that own suitable assets can apply, as well as limited companies. Lenders look closely at personal credit history and affordability. Finance of £25,000 or less to sole traders and small partnerships can be regulated consumer credit, which gives you additional protections.

How much cash can I raise through asset refinance?

The amount you can raise through asset refinance is a proportion of the asset's current market value, less anything still owed on it. Lenders set that proportion based on the type of asset, its age, condition and resale market, and on your business and credit profile. Plant and vehicles with strong second-hand demand usually support more than specialist or fast-dating equipment, and the term offered is limited by the asset's remaining working life.

Can I get asset refinance with bad credit?

Asset refinance with bad credit is often possible, because the lender's security is the equipment itself rather than your credit record alone. Lenders will still want to understand what caused the credit problems, whether they are settled and how the business is trading now. You may be offered less against the asset or a shorter term. Our guide to bad credit asset finance explains how lenders approach these cases.

How long does asset refinance take to arrange?

Asset refinance can complete within a few working days in straightforward cases, once the lender has the asset details, proof of ownership and recent accounts or bank statements. It takes longer where the asset needs a physical inspection or independent valuation, where an existing finance agreement has to be settled, or where several items are being refinanced together. Having invoices and service records ready shortens the process.

Does asset refinance affect capital allowances or VAT?

It can, depending on the structure. A loan secured on the asset leaves ownership with you, while a sale and leaseback or sale and hire purchase back changes how the asset is held, which may have tax and VAT effects. Your accountant should confirm the position before you sign. Our guide to asset finance and capital allowances covers the general principles.

Official guidance

Keep exploring

Related funding options

All guides