Refinancing an asset you already own
Equity sitting in plant you have already paid for can be released without selling it. Here is when that makes sense.
If you own a machine outright, or owe far less on it than it is worth, that difference is capital sitting idle. A sale-and-leaseback or an equity release lets you draw on it without giving up the asset.
The mechanics are straightforward: the lender values the asset, advances a proportion of that value, and takes security over it. You keep using it and repay the new facility.
The common reasons are working capital, funding a deposit on something larger, or consolidating several higher-rate facilities into one. The common mistake is using it to cover a shortfall that is going to recur — releasing equity does not fix a business that is not covering its costs, it moves the problem.
Age matters. Lenders will generally advance against equipment with useful life left; something near the end of its working life supports far less, if anything.
This guide is general information only. It does not take your objectives, financial situation or needs into account, and it is not financial, legal, tax or credit advice. Speak to us or another professional before acting on it.
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