What is Asset Refinancing?
All the information you need
If your business contains assets, such as machinery or specialised equipment, you could be sitting on a potential funding pot without even releasing it and it's called Asset Refinance. Call the experts on 020 3318 2613 to talk through the secured business finance product that more and more developing SMEs are using to release cash to use in their business. Asset Refinance allows your business to releases the equity contained in any of its unencumbered assets, and to do so quickly and efficiently.
If your business is in need of investment and you are looking to refinance current assets with a slow rate of depreciation, here’s what you need to know about Asset Refinance:
- How Asset Refinance works
- How much can I borrow with Asset Refinance?
- How is Asset Refinance repaid?
How does Asset Refinance work?
Asset Refinance is a secured business finance solution that’s also part of the Asset Finance range of products. It is not to be confused with Refinancing, or Debt Consolidation, which is a separate form of funding.
It’s a popular means of releasing cash by using the equity contained in any high-value and unencumbered business assets logged inside your business’ balance sheet. When applying, lenders will ask what the asset is and how it’s used. They will also need to know how much it’s worth, which will involve a qualified surveyor inspecting and forming a valuation of the asset involved.
When you receive your advance you are temporarily transferring ownership of the asset to the lender, but you’ll still be able to use the asset for your business without interruption. When you’ve fully repaid the agreement, ownership is transferred back to your business. However, because Asset Refinance is secured, lenders can remove the asset concerned from your business if you become unable to repay the finance agreement.
How much can I borrow?
The size of the advance, or lump sum, depends on the estimated value of the asset involved. This will be determined by a qualified surveyor who will look at the condition of the asset, how much usage it has experienced and its age, to form a valuation. The amount you could receive will be based on this valuation and how much the lender is willing, or able, to lend. So, before entering any finance agreement, work out your figures so you know how much money you’ll need for your business and any projects you intend to fund.
How is Asset Refinance repaid?
Asset Refinance is a secured loan, repaid using Fixed Monthly Repayments over an agreed period, or term, that can extend as far as 5 years. Fixed Monthly Repayments involve your business paying an agreed sum at the end of each month until the agreement has been fully repaid, plus interest. If your business becomes unable to keep up with the repayment scheme, the lender can remove the asset involved to recover their losses, since it’s a secured loan.
Thinking about refinancing your business assets?
It can be an arduous endeavour sourcing the most appropriate finance solution for your business, let alone acquiring the correct levels of funding necessary. Whether you’re a developing or established business and whether you're looking for finance for the printing industry to automotive, manufacturing and more, you need to know that asset refinance is right for your business. So, if your business contains valuable assets that you’re able to put up as security, you can apply for a Secured Asset Refinance agreement today, or find out more with Rangewell.