Asset Refinance: Releasing Cash From Owned Equipment
Asset refinance lets a limited company, LLP or partnership of 4+ raise cash against equipment, vehicles or machinery it already owns outright. The lender pays a lump sum against the asset's value and takes a charge over it, with repayments spread over an agreed term.
What is asset refinance
Asset refinance is a way of unlocking capital tied up in equipment, plant, vehicles or machinery a business already owns with no finance against it. A lender values the asset, advances a percentage of that value as a lump sum, and takes a legal charge over the asset until the loan is repaid.
It differs from a fresh asset purchase because no new equipment changes hands. The business keeps using the asset day to day while the lender's charge sits in the background. If the loan is not repaid, the lender can recover the asset, so this is secured lending, not a loan against general company assets.
Which assets qualify
Most tangible, resaleable business assets with a clear market value qualify, typically commercial vehicles, yellow plant, manufacturing machinery, printing equipment and specialist tooling. Lenders check the asset has an active secondary market, since resale value underpins the security.
Assets that are highly bespoke, near the end of their working life, or already carrying finance from another lender are harder to refinance. Some lenders will still refinance an asset with existing finance attached, but only after settling the original agreement, which reduces the net cash released. IT equipment and fast-depreciating items rarely qualify for meaningful sums.
How much a business can raise
Typical advances range from 60% to 90% of the asset's current market value, not its original purchase price, assessed by an independent valuation or trade guide. Newer, well-maintained assets with strong resale demand sit at the top of that range; older or niche equipment sits lower.
A director should expect the valuation to reflect wear, mileage or hours used, and any modifications. Multiple assets can sometimes be bundled into a single facility to raise a larger sum, which can suit a business refinancing a small fleet or a set of machines rather than a single item.
Cost and repayment structure
Repayments are usually fixed monthly instalments over 12 to 60 months, with the rate set by asset type, age, business credit profile and loan-to-value. Rates typically sit above prime commercial mortgage rates but below unsecured merchant cash advance costs, reflecting the tangible security involved.
Some lenders offer a balloon or residual payment structure, lowering monthly cost in exchange for a final larger payment. Early settlement terms vary significantly between lenders, so a business planning to repay early should check the settlement figure calculation before signing.
When asset refinance suits a business
Asset refinance suits a business that owns valuable equipment outright and needs working capital without disturbing an existing bank relationship or diluting equity. Common triggers are a VAT bill, a supplier payment, a short-term cash flow gap, or funding a deposit on separate growth finance.
It is generally a cheaper route than unsecured options because the lender has tangible recourse. It is less suitable for a business with no unencumbered assets, or one needing funds faster than a valuation and legal charge process allows, which typically takes one to three weeks.
Post-decline asset refinance
A business declined by its bank or an existing lender can often still raise funds through asset refinance because the lending decision rests primarily on the asset's value, not solely on the applicant's credit history. Specialist lenders in FundBiz's panel focus on loan-to-value and asset condition first.
A prior decline is not automatically disclosed to a new asset finance lender in the way it might affect an unsecured application, but directors should be upfront about it, since most applications involve a credit search regardless. Adverse credit typically reduces the advance percentage rather than ruling the option out entirely.
| Asset type | Typical advance (% of value) | Typical term |
|---|---|---|
| Commercial vehicles (HGV, van fleet) | 70-85% | 24-48 months |
| Yellow plant and construction equipment | 65-80% | 24-60 months |
| Manufacturing machinery | 60-75% | 24-60 months |
| Print and packaging equipment | 60-75% | 24-48 months |
| Agricultural equipment | 65-80% | 24-60 months |
Step-by-step
- List the unencumbered assets the business owns and gather purchase invoices, service history and registration documents
- Get an independent or trade-guide valuation for each asset to establish current market value
- Approach lenders with the valuation, latest accounts and management information to compare advance percentages and rates
- Agree terms and allow time for the lender's own inspection or desktop valuation and legal charge registration
- Receive funds once the charge is registered, typically one to three weeks from application
Example
A logistics partnership of six owned four delivery vans outright, each roughly two years old. Facing a VAT payment deadline, the partnership refinanced the vans, raising 75% of their combined trade valuation over a 36-month term. The vans stayed in daily use throughout, and the VAT bill was settled without touching the partnership's working capital facility.
Frequently asked questions
Can I refinance an asset that still has finance on it?
Some lenders will refinance an asset that already has an outstanding finance agreement, but they typically require the existing balance to be settled from the new advance first. This reduces the net cash released, so it is worth checking the settlement figure before applying rather than assuming the full valuation is available as cash.
Does asset refinance affect ownership of the equipment?
The business retains use of the asset throughout the agreement, but the lender registers a legal charge against it until the loan is repaid. If repayments are missed, the lender has the right to repossess the asset, similar to any other secured lending arrangement.
How is the asset valued?
Lenders usually rely on an independent valuation, a trade guide figure, or their own desktop assessment based on age, condition, mileage or hours used, and current resale demand. Original purchase price is not used, since the advance is based on current market value.
Is asset refinance available to LLPs and partnerships, not just limited companies?
Yes. FundBiz matches limited companies, LLPs and partnerships of four or more partners to lenders offering asset refinance, provided the entity itself owns the asset being refinanced rather than an individual partner personally.
What happens if the business has been declined for other finance?
A prior decline for an unsecured facility does not automatically prevent asset refinance, since the lending decision leans heavily on the asset's value and loan-to-value ratio. Adverse credit history may reduce the percentage advanced or narrow the panel of lenders willing to proceed, rather than ruling the option out.
By Adam Parker, Director, Best Business Loans Ltd. Last reviewed 2026-07-24.