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Why Asset Refinancing is the best option for your business

Published on 6th November 2017 - Last update on 7th July 2020

Obtaining the funds you need to grow and develop your business can be difficult, especially if you’re not sure how. But for many SME businesses, the solution could come in the form of their own assets. If your business owns valuable, unencumbered assets, you could apply for an Asset Refinancing agreement today. Asset Refinance (which is different to refinancing existing debts) is an increasingly popular secured method of business finance that sees the equity contained inside valuable assets, such as equipment or property, released to your business. This gives you the ability to invest in your business and expand in total confidence, making Asset Refinance an invaluable resource. So if you believe Asset Refinance presents an opportunity that’s worth exploring, let’s take a look at:

  • Why should you consider Asset Refinancing?
  • How much equity can I release?
  • How long terms can last for?

Why should I apply for Asset Refinance?

Asset Refinance is a secured product that allows you to raise cash through the equity contained in valuable business assets, such as equipment, vehicles, machinery or property, which possess a slow depreciation rate. These assets must also be unencumbered, meaning that your business owns the assets put forward outright, without them being part of any existing financial commitment. But what gives Asset Refinance its appeal is how the funds can be applied in and around your business in whatever manner you see fit. So, if your goal is to fund or support projects such as refurbishments, renovations, equipment purchases, cash injections and so on, you can.

Another benefit of asset refinance is that you avoid the potential fallout from using your own capital to purchase equipment outright. Although this may seem a smart move at the time, it could lead to issues later. If your business hits a slow sales period after paying for the equipment, you may lack the cash necessary to pay down other financial commitments. As such, you could to reinforce your capital using a cash injection supplied using the concerned asset as collateral for an Asset Refinance agreement.

In need of a large lump sum? Got valuable business assets? Apply and unlock the cash contained in your business’ assets today, or learn more about Asset Refinance can help your business!

How much cash can I borrow with Asset Refinance?

By choosing to apply for a secured Asset Refinance solution for your business, the amount of funding that your business could receive is determined by the asset’s estimated resale worth. Because of this, there isn’t a set upper limit to what you could borrow, the cap is provided by the equipment itself. To determine the worth of the asset and form a lump sum, lenders will want to know the make and model number of the asset, proof and date of purchase, and it’s usage. In addition, a qualified surveyor will also carry out an inspection and valuation of the asset to establish its potential resale worth.

Therefore you need to work out, prior to applying, how much funding your business requires and how many assets you may need to present. This will help you choose a lender who can afford to lend the amount of cash required, since some lenders may impose their own upper limits. For instance, whilst one lender may support anything up to £500,000, another could offer you £1,000,000 or £5,000,000 and beyond.

How long can an Asset Refinance agreement last for?

Asset Refinance agreements typically last up to 5 years, sometimes longer in certain cases. The benefit of this is that you can spread the payment out over a longer period, making the Fixed Monthly Repayment scheme more manageable. Throughout the course of the agreement, you will be required to pay fixed sums each month, plus interest. This, in turn, allows you to budget more effectively and possibly even anticipate potential cash flow issues, giving you time to plot a suitable course of action.

Looking to refinance your business’ assets?

Finding a business finance solution that’s appropriate for your business needs can be frustrating, but you could look at how to refinance current assets. However, if you’re in need of a large lump sum and own valuable business assets you could apply for Asset Refinancing. Nevertheless, you still need a product that offers your business a competitive interest rate from a lender that you can trust. Although sourcing an appropriate lender can be difficult and take precious time away from your business, we’ve already done the hard work for you. If your business contains valuable assets that you’re able to put up as security, apply for a secured Asset Refinance agreement today, or find out more with Rangewell.

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David Harrison

David Harrison

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