Refinance equipment you already have on finance and release the equity
If your vans, trucks or plant are worth more than you still owe on them, you can refinance. A new lender pays off your existing finance agreement, and you receive the difference as cash. You keep using the assets the whole time.
The short answer
This works even when the current finance is with another company. Direct Commercial Finance is a broker, not a lender: we ask our panel of funders to price the refinance, and you choose the offer that suits you. What you need to get a quote: a list of the assets (make, model, year, registration or serial number) and a settlement figure from your current lender. We can help you request it.
How refinancing works
- Tell us what you have.Send the asset list and the name of your current lender. A rough idea of what you owe is enough to start.
- We get your settlement figure.This is the amount your current lender needs to close the agreement. It is usually valid up to the day before your next payment is due.
- Funders value the assets and quote.Each funder assesses the assets and the business, then offers an advance. We compare the offers with you.
- The new lender settles your old agreement.The settlement figure is paid straight to your current lender.
- You receive the equity.What is left of the advance after the settlement figure is paid to your business, and your new agreement starts.
Throughout, the assets stay with you and keep working. We can turn round agreements in 48 hours.
What is equity?
Equity is what an asset is worth today minus what you still owe on it. If a van is worth £18,000 and the settlement figure is £11,000, there is £7,000 of equity in it. A new lender will not usually advance the full market value. Funders can advance up to 95% of value, so the cash you can release is lower than the equity on paper.
Worked example (illustration only)
Example: five vans already on finance
- 5 vans, current market value
- £90,000
- Owed to current lender (settlement figure)
- £48,000
- New lender advance (illustrative, up to 95% of value)
- £85,500
- Paid to settle the old agreement
- £48,000
- Cash released to the business
- £37,500
This is an illustration only. Real figures depend on the assets, the business and the lender. It is not an offer or a quote.
The new agreement then runs over an agreed term, so the monthly payment, term and total repaid will differ from the old one. We show the old and new side by side before you decide, so you can see what the extra cash costs.
Which existing agreements can be refinanced?
| Your current agreement | Can it be refinanced? | What to know |
|---|---|---|
| Hire purchase | Usually yes | You are buying the asset, so a new lender can settle the balance and take over the funding. |
| Finance lease | Yes | The lessor owns the asset, so the new lender settles the lease with them first. Send us the agreement and we will confirm the figures. |
| Contract hire / operating lease | Generally not for releasing equity | You are renting the asset and do not own the equity in it. |
| Loan secured on the asset | Yes | The loan is settled from the new advance. Send us the details and we will confirm what is possible. |
Not sure which agreement you have? Send us a copy or the lender’s name and we will tell you.
What does it cost, and what should I check?
- Early settlement terms on your current agreement. Check what you owe if you close it early, including any charges or rebates.
- Longer term, more interest. Stretching a balance over a longer term can lower the monthly payment but raise the total repaid.
- Valuation. A lender’s valuation can differ from yours, which changes how much cash you can release.
- Security. The new agreement is secured on the assets, just as the old one was. Missing payments has the same consequences.
We lay these out in plain figures, old deal against new, so you can judge whether it is worth doing.
When refinancing may not make sense
Little or no equity
If the assets are worth little more than you owe, there is nothing useful to release.
You plan to sell or replace soon
A new agreement over assets you are about to move on can add cost without much benefit.
The new deal costs more than the cash is worth
If the new agreement would cost more over its life than the cash is worth to you, it is not the right move.
Specialised or very old assets
These can limit what funders will advance.
If it is not the right move, we will say so.
Why businesses refinance
- Working capital or a cash buffer for a quieter period
- A deposit for new vehicles or equipment
- Consolidating several agreements into one payment
- Lowering monthly payments by changing the term
- Funding a tax bill or a one-off cost
If your assets are owned outright with no finance outstanding, see sale and leaseback. See also hire purchase vs finance lease vs contract hire, commercial finance broker vs bank and our case studies.
Frequently asked questions
Can I refinance if I am still paying another finance company?
Yes. That is the main use of refinancing. The new lender pays your current lender's settlement figure, and any remaining value is released to you as cash.
Will I keep my vehicles and equipment?
Yes. The assets stay with your business and keep working. Only the funding behind them changes.
What if I owe more than the assets are worth?
Then there is no equity to release, and refinancing is unlikely to give you cash. We can still look at whether a different term would lower your payments.
Does refinancing affect my credit file?
Our initial checks are soft searches, which are not marked on credit files. A new lender will carry out its own credit checks on the business, and a new agreement will appear on its record.
How quickly can I get the money?
It depends on how quickly we get your settlement figure and the funder's valuation. We can turn round agreements in 48 hours.
Can I refinance assets that are on a finance lease?
Yes. The lessor owns the asset, so the new lender settles the lease with them, and any remaining value is released to you as cash. Send us the agreement and we will confirm the figures.
Find out how much equity you could release
Tell us what you have and who you are financed with. We will come back with options from our panel. Call 01634 715 690.
Get a Quick Quote →Direct Commercial Finance Ltd is a commercial finance broker, not a lender, working with UK limited companies. Finance is subject to status and lender approval.