Asset Refinance
Releasing cash from equipment or assets your business already owns by selling them to a lender and leasing them back.
Asset refinance (also called sale-and-leaseback) allows businesses that own assets outright to release the equity tied up in those assets as cash. The business sells the asset to a finance provider and immediately leases it back, retaining full use of the asset while receiving a lump sum equal to the agreed value.
This is a powerful working capital tool for asset-heavy businesses. A manufacturing business owning £500,000 of machinery outright could refinance those assets, release £300,000-400,000 in cash, and continue using the machinery under a new lease agreement with monthly payments spread over three to five years.
Asset refinance is also used to restructure existing hire purchase or lease agreements - for example, to extend the term and reduce monthly payments during a cash-constrained period. Most specialist asset finance lenders consider refinance applications for vehicles, plant, machinery, and commercial equipment.
Example
A transport company with five HGVs owned outright refinances them for £800,000, using the cash to fund a contract requiring additional working capital.
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