Business hire purchase: spread the cost and own the asset
Business hire purchase is a way to buy a vehicle, machine or piece of equipment over time. A lender buys the asset, you pay a…
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.
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- Amount
- From £10,000 to £20 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
What you need to know.
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.
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.
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
About asset refinance
Specialist knowledge. Better outcomes.
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.
- Access to 300+ lendersWhole-of-market search across our lender panel.
- Independent brokerSmart Funding Solutions is an independent broker, not a lender.
- Tailored to your caseYour case presented to lenders suited to it.
- Support from start to finishOur experts handle the process from start to finish.
How do I release cash from machinery I already own?
You can release cash from machinery you own through asset refinance: a lender advances money against the machine's current resale value and you repay over an agreed term while it keeps working. Smart Funding Solutions, a whole-of-market commercial finance broker, approaches asset finance lenders that refinance plant and machinery, including kit still on finance with equity left in it.
01
How machinery refinance works
- List the assets: make, model, year, serial numbers and any finance still outstanding.
- Valuation: the lender values each machine at what it would sell for today, not what you paid.
- Structure: usually sale and leaseback or a refinance hire purchase agreement, so ownership returns to you at the end.
- Settlement: if the machine is still on finance, the new lender settles the old agreement and pays you the difference.
- Funds released: the cash goes to your business account for working capital, a tax bill, new equipment or growth.
02
Who it suits
Manufacturers, engineering firms, contractors, plant hire companies, farmers and hauliers who bought kit outright or have paid down existing finance. See machinery finance, plant finance, construction finance and farm machinery finance.
03
What lenders look at
- The machine's age, condition, remaining working life and resale market.
- Proof of ownership, such as purchase invoices or a settlement letter.
- Accounts, bank statements and affordability.
- Credit history of the business and directors.
04
What to watch
Bespoke or immovable machinery is harder to refinance than standard plant. Check the VAT and capital allowances position with your accountant before signing a sale and leaseback, and compare the total repayable with an unsecured loan or invoice finance. Lenders on our panel that refinance assets include Close Brothers, Aldermore and Davenham Asset Finance; see their reviews for what each funds. Asset finance, including refinance, can also be offered under the British Business Bank's Growth Guarantee Scheme. To see which lenders match your machinery, use Instant Quotes.
Can I refinance my vans and equipment to release cash?
Yes. Vans, trucks and equipment you own outright, or that have equity left after existing finance, can be refinanced to release cash. A lender advances a share of their current value and you repay monthly while you keep using them. Smart Funding Solutions, a whole-of-market commercial finance broker, compares lenders that refinance fleets and mixed equipment and arranges the best fit.
Vans are one of the easiest assets to refinance because they have an active resale market and clear trade values. A mixed list of vans, trailers, tools and plant can often be refinanced together under one agreement.
01
What lenders usually ask for
- Registration numbers, mileage and the V5C logbook for each vehicle.
- Settlement figures for any vehicles still on finance.
- Recent business bank statements and accounts.
- Details of how the vehicles are used and who drives them.
02
Who it suits
Trades, delivery and logistics firms, builders and contractors whose cash is tied up in their fleet. See van finance, vehicle and fleet finance, haulage and HGV finance, plumbing and heating business finance and electrical contractor finance.
03
What to watch
- Older, high mileage vans attract a smaller advance, and some lenders cap the vehicle's age at the end of the term.
- Refinancing adds a new monthly payment, so check it fits alongside existing finance. Our business loan calculator helps.
- Check vehicle compliance for clean air zones before refinancing an older fleet; ULEZ vehicle finance covers upgrading instead.
Asset finance can also be offered under the British Business Bank's Growth Guarantee Scheme, from £1,000 through accredited lenders. To see which lenders would refinance your vans and equipment, use Instant Quotes (no credit check).
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.
Aircraft and helicopters owned outright can also be refinanced to release capital for an engine overhaul or upgrade; our page on aircraft loans and aviation finance explains how lenders assess them.
Owners of working boats can sometimes raise cash against a vessel they own outright; our guide to fishing boat finance covers how lenders value vessels and why the licence must stay with the boat.
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
01
The asset's value, age, condition and resale market.
02
Any outstanding finance and its settlement figure.
03
Trading history, accounts and bank statements to show affordability.
04
Business and director credit history.
05
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 |
Our guide to sale and leaseback finance covers both sale and buy-back structures in more detail, including which assets lenders accept and when.
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.
Calculator
Run the numbers first
Illustrative figures from the numbers you enter, before you speak to a lender.
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.
How do I release cash from machinery I already own?
Use asset refinance: a lender advances money against the machinery's current resale value, usually through sale and leaseback or refinance hire purchase, and settles any existing finance first. Smart Funding Solutions arranges asset refinance from lenders on its panel of 300+. Get Instant Quotes.
Can I refinance my vans and equipment to release cash?
Yes. Vans and equipment you own, or with equity left after existing finance, can be refinanced: a lender advances part of their current value and settles any old agreement, and you repay monthly while using them. Smart Funding Solutions compares lenders that refinance fleets and equipment. Get Instant Quotes.
Lender reviews
Lenders we compare for asset refinance
Independent write-ups of lenders on our panel that offer this type of finance. Smart Funding Solutions is a broker and is not part of any lender listed. See all lender reviews.
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