Can I refinance existing assets to release cash (sale & leaseback)?
Quick answer
Yes — many established UK businesses can refinance owned assets using a sale and leaseback to release cash while continuing to use the assets. This is a common form of asset finance that converts fixed assets into working capital without taking on additional secured borrowing in many cases.
What is a sale and leaseback and how does it refinance assets?
A sale and leaseback converts an owned business asset into cash by selling the asset to a specialist funder and immediately leasing it back. This is effectively asset-backed refinancing where the buyer becomes the lessor and your company becomes the lessee. The original owner continues operational use under a lease that sets rental levels, terms and maintenance responsibilities.
The transaction typically covers equipment, vehicles, plant and some specialised machinery that have remaining economic life. Lenders will value the asset and offer a purchase price that reflects market resale value, age, and condition. The sale proceeds are paid to the business up front and the lease spreads the cost back over a fixed term.
Sale and leaseback is distinct from secured lending because ownership transfers and the lease is an operating or finance lease depending on structure. Some structures reduce reported debt on balance sheets, while others create lease liabilities under accounting standards such as IFRS 16. Your accountant or adviser should review the accounting and tax consequences before proceeding.
Who can use sale and leaseback and which assets qualify?
Sale and leaseback is widely available for established UK companies with asset values and stable trading history. Typical candidates are SMEs and mid-market firms in manufacturing, logistics, construction, transport and healthcare. Start-ups and sole traders are less likely to qualify because lenders usually want at least a couple of years of trading performance and clear asset ownership history.
Assets commonly accepted include commercial vehicles and vans, plant and machinery, production equipment, catering and hospitality equipment, and some IT hardware. Lenders may refuse extremely old, obsolete or highly customised assets that lack resale value. Age, condition, maintenance records and serial numbers are important for valuation.
Eligibility also depends on the company’s credit profile, tax standing, and existing security arrangements. If an asset is already subject to a hire purchase or a finance agreement you will usually need consent from the existing secured creditor before proceeding. Your adviser can help clear any charge or refinance the existing facility as part of the solution.
Benefits and drawbacks of sale and leaseback
Major benefits include immediate access to cash without losing use of essential assets, improved liquidity to invest or pay suppliers, and the ability to restructure balance sheet commitments. Sale and leaseback can be faster than unsecured loans and may allow businesses to avoid diluting ownership or adding personal guarantees in some cases. It can also be combined with other asset finance solutions.
There are trade-offs: your business will pay lease rentals which may be higher over time than owning the asset outright. Some sale and leaseback deals include maintenance obligations and return conditions that can create costs at contract end. Accounting treatment of lease liabilities may affect reported gearing and covenants, so review implications with your finance team.
Risk factors include loss of control over disposal of the asset and potential restart costs if the lease is terminated early. Also, not every asset realises full book value on sale; lenders price conservatively to allow future resale. Compare offers carefully and understand early termination, insurance and maintenance clauses before signing.
Typical process, timescales and costs
The process normally starts with an asset inspection, valuation and credit assessment by the funder or leasing company. If you use an introducer or broker, that intermediary will present the data to multiple providers to speed up matching. Once priced, you sign a sale contract and a lease agreement; funds are paid on completion and the lease begins on the agreed date.
Timescales range from a few days for simple, low-value assets to several weeks for larger or specialist equipment requiring legal searches and crewing. Costs include any transaction fees, legal fees for transfer of title, VAT on lease rentals (where applicable) and ongoing rental payments. Some funders charge documentation or arrangement fees that should be disclosed up front.
Key documentation usually includes proof of asset ownership, maintenance records, copies of existing finance agreements, financial accounts, and ID documents for directors. Lenders will conduct due diligence; being organised with invoices, photos and service histories speeds approvals. If assets are subject to a charge, your introducer can help negotiate release or subordination with the existing lender.
How Best Business Loans helps with the sale and leaseback journey
Best Business Loans does not provide funding but uses AI-driven matching to connect you to relevant lenders and brokers who specialise in sale and leaseback and wider asset finance options. Our platform shortens time to decision by identifying providers actively lending in your sector and presenting realistic match options. Submit a Quick Quote and we’ll run a free eligibility check and targeted introductions tailored to your business and assets.
For detailed asset finance options see our asset finance page for context and examples: Asset finance. That page explains leasing, hire purchase and other products that often form part of an optimal refinance plan. We recommend discussing accounting and tax implications with your adviser alongside any finance decision.
Alternatives, decisions to consider and next steps
If sale and leaseback doesn’t fit, alternatives include secured loans, asset refinancing with fixed or floating charges, hire purchase, invoice finance, and revolving credit facilities. Each option has pros and cons for cost, speed, security and covenant impact. A blended solution is common: for example unlocking some value with sale and leaseback while arranging invoice finance for working capital.
Before proceeding, checklist items include confirming asset ownership and warranties, getting independent valuations, modelling cashflow impact of lease rentals, and reviewing covenant and tax effects. Ask providers for a clear illustration of total lease costs over the term and any restoration obligations at lease end. Negotiate rental profiles where possible to match expected cashflow cycles.
To get started, use our Quick Quote form for a no-obligation eligibility check and match to providers who handle sale and leaseback transactions. We’ll only introduce lenders and brokers suitable for your sector and asset type and will be transparent about our role as an introducer. If you prefer guidance first, our UK support team can explain typical structures and likely outcomes before you submit details.
Key takeaways
Sale and leaseback is a practical way for established UK businesses to refinance owned assets and release cash while retaining use of the assets. Benefits include fast access to working capital and reduced need for new secured borrowing, but businesses should weigh lease costs, accounting impacts and end-of-lease obligations. Best Business Loans can help you compare options and connect with specialist providers through a free Quick Quote and eligibility check.
Ready to explore whether sale and leaseback suits your business? Complete our Quick Quote to get matched with lenders or brokers who specialise in asset-backed refinancing. It’s free, quick, and helps you move from interest to decision with clearer options.
Start your Quick Quote or contact our support team at hello@bestbusinessloans.ai for a friendly walkthrough of next steps.
Frequently asked questions
Will a sale and leaseback affect my business credit rating?
Lease obligations may appear on credit reports and in covenant calculations, but the immediate cash injection can improve liquidity ratios. Speak with your accountant to model credit metrics before committing.
Can I include multiple assets in one sale and leaseback deal?
Yes — funders often package fleets or multiple machines into a single transaction to improve pricing and simplify contracts. Consolidation can be more efficient and attractive to lenders.
Do I need broker support or can I approach funders directly?
You can approach funders directly, however a broker or introducer can speed comparison across the market and surface lenders who are actively funding your asset class. Best Business Loans can introduce suitable providers after a Quick Quote.