Refinancing is the process by which a business can use their existing assets to raise additional capital for a number of purposes, these assets are usually unencumbered (free from finance).

By releasing capital tied up in fixed assets we can help improve cash flow and stability for a business. Funds can be used to recover from bad debt, reduce bank overdrafts or other debts. The injection of working capital can fund expansion of the business or to fund management buy ins/outs.

Refinance agreements can be provided on a Lease/Hire Purchase or Lease agreement, they are often referred to as  “Sale and Leaseback” or “Sale and Lease Purchase Back”.

Some of the reasons to refinance may include:

To reduce existing monthly commitments

To spread the remaining balance of an existing finance agreement over a longer term (to reduce the monthly payments).

Bad debt provision

To recover from a Bad Debt or to reduce bank borrowing (i.e. overdraft).

Management buy ins/outs

Refinancing the assets of a business can raise capital to purchase another business or to aid the restructuring of the business.

Raising capital

Without outside investment, a business can raise capital for expansion from their existing assets.

Purchasing other equipment

Some businesses may find that they cannot easily obtain asset finance for new machinery, but they could raise the funds by refinancing their existing assets (or by offering them as additonal security).

For more information regarding leasing or any of our products, please speak to your Account Manager or contact the sales team.

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