Asset refinance uses security in an existing business asset to lend funds against. In simple terms, you sell the asset to an asset finance company in return for a lump-sum payment. You then repay the refinancing agreement in regular instalments over an agreed period.
The process is usually very quick and can give you a welcome cash injection to boost working capital or invest in other areas. To get the agreement in place, business finance providers will need to get some information about the asset to be refinanced. This will vary depending on the asset type but will typically be:
- Proof of ownership
- Make and model of the asset
- Year of manufacture
- Date of purchase
- Current usage (hours or miles)
The finance company will then value the asset based on this information. The business will also need to be assessed from a lending perspective to understand its credit status. Because there is security within the asset, this can be easier to qualify than for some other forms of finance, such as an unsecured business loan.
Once the agreement is completed, the funds are released quickly, often as soon as 24 hours.