Asset Refinancing

  • Easy online application, apply for finance in minutes
  • Receive two competitive quotations from approved lenders
  • Repayment periods from 1 month to 60 months
  • Finance available from £5,000 to £150,000
What is Asset Refinance?

Asset refinance is simply a lending facility where a loan is advanced against valuable assets that your business owns. These assets can be anything from photocopiers to vehicles or other equipment that can be held on the company’s balance sheet. It’s an extremely straight forward facility allowing you to release cash from the asset. The amount you can borrow depends on the value of the assets involved. Financiers will also fund assets where there is an outstanding balance owed to another lender. This again is quite straight forward as the financier will establish the value of the asset and then lend against the equity that you hold to an agreed set percentage. However, the financier will repay the first lender, thus ensuring that they now have full control and title of the equipment until the final repayment has been made. There are a number of lenders who will consider almost anything that has a resale value. There are, however, a number of requirements and considerations when seeking approval for asset refinance. These are noted below:

Approval Considerations
  • It’s likely that an asset valuation will have to be carried out by an independent surveyor that may incur a small cost to the business. This is to ensure the true value in which the funder is able to lend against
  • The asset generally has to be critical to your operations
  • The item should also be removable and clearly identifiable so it can be taken as security for the loan
  • The finance is secured against a physical asset, thus providing the lender the reassurance that if things go wrong and you can’t keep up with repayments, they can take the asset to recoup their losses
Why use Asset Refinance?
  • It allows the immediate access to cash needed for the business
  • Agreements can be tailored with flexibility on both the term and repayment schedule to support cash flow
  • The business owns the asset outright once the final repayment has been made
Asset Refinance examples

Asset owned outright:
Asset Value £10,000 = 100% equity of the asset on the company balance sheet

Financier agrees the value and advances a loan against the security of the asset e.g. 70% Loan to Value = loan advance of £7,000. There will be an agreement in place between the business and the financier, whereby a monthly repayment will be made and on the final payment the title of the asset will return to the company, and the charge over the asset released. This will be applicable to any asset, whether it’s a fleet of vehicles or a property.

Asset with an outstanding loan:
The business has a vehicle worth £10,000. They acquired the vehicle on a hire purchase agreement, and they still have £1,000 left to pay until the asset is owned by them. This means the business has £9,000 of equity in the vehicle and the hire purchase provider owns the remaining £1,000 of equity.

Providing the new financier agrees to the value of the asset, the business can refinance the company’s vehicle up to the value of approximately £7,000, as per the last example equalling 70% of the vehicles overall value. The new financier would then pay the hire purchase firm the remaining value of £1,000 in order to take the charge over the asset and lend the company £6,000 based on its agreed value.

Does my business qualify for finance?

The following is a brief guide to the acceptance criteria for finance, but is not a guarantee. All circumstances will be considered and an assessment will be made on an individual case by case basis.

  • Business to be trading for a minimum of two years
  • The business is profitable
  • No legal notices or insolvency proceedings
  • Defaults must be over two years old and not more than £1,000 in value or a reasonable explanation must be provided / evidenced
  • Be a registered business within the UK
  • UK homeowner (minimum of one director)
  • The loan amount is less than 25% of the business annual turnover (Revenue and Turnover will be assessed to confirm affordability to this level)
What will we need to provide?

Firstly the online application will need to be complete. Once this has been done you will need to send the following information to

  • The last three month’s bank statements
  • The last full set of financial accounts
  • Balance Sheet and Profit & Loss
  • Draft accounts (if the full year end accounts are over 12 months old)
  • All directors to complete an asset and liability statement (Click to open and save)
How do I know if this facility is right for my business?

From the above information, you should be able to establish if this is the best product for your business, but we would always encourage you to discuss all options with your accountant to ensure you make the most of your working capital.