What does asset refinance mean?
Asset refinance is a way for a business to release capital from suitable vehicles, machinery or equipment it already owns or is currently financing.
The exact meaning can vary depending on the asset, lender criteria, agreement wording and business circumstances.
How asset refinance works
A lender considers the asset, its current value, ownership position and the business's ability to repay. If approved, a new facility is secured against the asset and the business continues using it while releasing an agreed amount of capital.
Assets commonly considered
Commercial vehicles, plant, manufacturing machinery, agricultural equipment and other identifiable assets with a useful life and resale market may be suitable. Eligibility depends on age, condition, value, title and lender appetite.
What businesses use it for
Released funds may support working capital, stock, a deposit on another asset, seasonal pressure or a planned investment. Refinancing creates a new repayment commitment, so the purpose and affordability should be clear.
Useful next steps
Frequently asked questions
Can a financed asset be refinanced?
It may be possible where the current settlement figure, asset value and proposed new facility leave enough usable equity and the new lender is satisfied with the proposal.
How much can a business release?
The amount depends on the lender's valuation, existing finance, asset type, condition, age and the wider affordability assessment.
Related finance product
Asset Refinance
Release capital tied up in owned vehicles, machinery or equipment to support cash flow or growth.
Written by: Hart Asset Finance
Reviewed by: T & L Leasing Limited trading as Hart Asset Finance
Last reviewed: