What is Asset Refinance?
Asset refinance is a way of releasing the equity a business holds in its existing hard assets to generate working capital. The assets are sold to a lender and then re-acquired by financing them on a Hire Purchase or Lease agreement (sale and HP-back/sale and lease-back), or Loan and Chattel Mortgage. If the assets are already on finance it is still possible, provided there is sufficient headroom/equity. This is often done to achieve the dual purpose of releasing cash and reducing the existing monthly finance commitment.
Benefits of Asset Refinance
- One of the fastest methods of capital raising
- Lender security usually only the assets financed
- Can be a way of reducing monthly outgoings
- Can be financed on a Lease or Hire Purchase agreement
- No capital outlay/no deposit payable
This can be used for :
- financing a deposit on new vehicles/equipment
- acquiring a new business
- financing other business expenditure/investment
- injection of capital when cash flow tight