Asset Refinancing

Asset refinancing involves using the value of something that you own or partially own – such a property or high-value machinery – in order to access a new business loan, asset finance agreement, or negotiate better terms for your current loan.

You can either use this new loan to pay off a previous debt or unlock extra finance to cover your business expenses.

Anglo Scottish’s unique portfolio of 70+ funding partners means we can easily help your business find the ideal lender for your asset refinancing.

You can take out an asset refinancing agreement on any type of equipment that has value – not just a building or land. For instance, you could feasibly refinance machinery or specialist equipment used within your industry.

Types of equipment refinancing

There are two main types of asset refinancing agreement:

A sale and leaseback agreement – If you are still paying off a hire purchase agreement, this form of asset refinancing allows you to sell your asset to a new lender, while you keep using it. They will provide a lump sum for the asset, which you will repay monthly, giving your business an instant cash injection.

Once the refinancing agreement comes to a close, ownership of the asset will revert to you. If you fail to meet your monthly payments, the lender is within their rights to repossess the asset to cover the outstanding fees.

A secured loan – If you own your asset outright, you can secure your refinancing agreement against it while retaining outright ownership of the asset – unlocking further funds for your company operations.

You may be able to borrow more money in this scenario, due to your business having more equity in the asset.

Benefits of asset refinancing

There are a number of benefits for you when it comes to asset-based refinance:

• No need to own the asset outright – You can secure a loan against an asset that has not been entirely paid off, providing quick access to working capital.
• Spreading the cost – Monthly repayments to your new lender allow you to spread costs over a set period of time, usually up to five years.
• Instant ROI – As you can access the asset straight away, you will receive an instant return on your investment.
• Suitable for a range of assets – Whether owned outright or partially, you can secure a loan against a variety of assets, including property, machinery and vehicles.
• Tax benefits – Any interest paid on your asset refinancing agreement can be logged as a business expense, making it tax deductible. This reduces your taxable profits and lowers Corporation Tax.
• Poor credit isn’t an issue – adverse credit is often not as much of an issue as it can be with other types of financing.

Does your company only hold ‘intangible’ assets? These assets – including software, branding and licensing – are accepted as security by some lenders. If the loss of the asset would prevent your business from operating as usual, it has value – therefore, it is eligible for asset refinancing.

Alternatives to asset refinance

Not sure if asset refinancing is right for your business? Anglo Scottish provides a number of other funding services that don’t revolve around your existing assets.

Our commercial finance options will help you access the most competitive business loan rates currently available, while our vehicle finance agreements are ideal for businesses looking to invest in company cars or a new fleet of vans.

We also offer a range of other asset finance options, including finance leases, contract hire agreements and so much more.

Contact us

Get in touch with Anglo Scottish’s experts to discuss your asset refinancing options today.