Can I refinance existing equipment to release cash or consolidate agreements?
Short answer
Yes — many UK businesses can refinance existing equipment to release cash or consolidate multiple finance agreements, subject to lender criteria and the age, condition and value of the assets. The right route depends on whether you want cash release, lower repayments, a single agreement, or to change the funding type. Best Business Loans helps match you with lenders or brokers who specialise in equipment refinance so you can check eligibility quickly.
How equipment refinance works
Equipment refinancing means replacing one or more existing finance agreements with a new arrangement secured on the same assets. This can be done to release cash, reduce monthly payments, extend terms, or consolidate multiple agreements into a single facility. Lenders will assess the asset value, remaining contractual obligations, business performance and credit profile before offering terms.
Common refinance structures
Typical options include refinancing to a new hire purchase, finance lease, or an asset refinance facility. Some businesses move from multiple short-term leases into a single medium-term hire purchase to improve cashflow and administration. Others use asset-backed term loans to release equity from equipment while keeping it in use.
Who can refinance equipment?
Established SMEs and limited companies with demonstrable trading history are most likely to qualify for refinancing. Lenders often prefer businesses in asset-rich sectors such as transport, construction, manufacturing and logistics. Early-stage firms, sole traders and companies with very old or obsolete asset fleets may face restrictions or lower valuations.
Releasing cash from equipment
Refinancing to release cash (also called cash-out refinancing) allows you to borrow against the residual value of owned or financed equipment. The amount you can release depends on the lender’s loan-to-value (LTV) ratio and the asset’s current market value. Typical LTVs vary by asset type; specialist assets may attract higher or lower LTVs depending on remarketability.
Practical uses for released funds
Released cash can be used for working capital, hiring staff, purchasing inventory, or funding growth projects. Using secured asset finance often gives faster access to funds than unsecured loans, particularly when the asset value is clear. It is important to weigh the benefits of available cash against the longer-term cost of restructured finance.
Tax and accounting considerations
Different refinance structures have different accounting and tax implications for your balance sheet and profit and loss. For example, hire purchase typically capitalises an asset and creates depreciation, while some leases remain off-balance-sheet depending on accounting standards. Always check with your accountant before restructuring to understand tax effects and cashflow impact.
Consolidating multiple equipment agreements
Consolidation replaces several separate agreements with one new facility, simplifying payments and reducing administrative overhead. Consolidation can cut costs through lower combined repayments, longer repayment terms, or reduced fees and penalties. Lenders will consider the aggregate outstanding balances, asset equity and any early termination charges on existing contracts.
When consolidation makes sense
Consolidate when you have multiple payments, varying interest rates or mismatched expiry dates that complicate cashflow management. Consolidation is also useful if you can secure a single lender offering a better overall rate or more flexible terms. It is not always beneficial if the term extension increases total interest paid beyond the value of short-term relief.
Things to watch for
Check for early termination charges, negative equity positions, and any clauses restricting refinance in your existing contracts. Some leases include heavy end-of-term penalties or restrictions on assignment that affect refinancing options. Getting a clear payout figure and contract terms up-front helps avoid unwelcome surprises during consolidation.
Eligibility, valuation and lender criteria
Lenders evaluate the age, condition, make and model of equipment and its secondary market demand to calculate a valuation. Typical eligible assets include tractors, diggers, commercial vehicles, manufacturing machinery and specialist plant with resale value. Asset age limits vary; newer, higher-demand items command better rates and higher LTVs.
Credit and trading requirements
Most lenders expect at least 12 months of trading history for SMEs and may require company accounts, bank statements and management information. Strong trading performance, good banking behaviour and stable sector outlook increase your chances of competitive offers. If your credit profile is challenged, specialist brokers may place you with lenders that accept higher-risk cases, often at different pricing.
Documentation you’ll need
Prepare copies of existing finance agreements, asset schedules, maintenance records and proof of ownership or title. Lenders often request recent invoices or valuation reports and may inspect assets before approving refinancing. Clear documentation speeds approval and strengthens negotiation on terms.
How to explore refinance options with Best Business Loans
Best Business Loans is an independent introducer that uses AI-driven matching to connect you with lenders and brokers experienced in equipment refinance. We do not provide loans ourselves; instead we help you discover the most relevant providers based on your business profile and asset type. Submitting a Quick Quote takes only a few minutes and helps reveal potential solutions and indicative terms.
What the Quick Quote delivers
Your Quick Quote gives a Decision in Principle or eligibility insight from lenders and brokers, without affecting your credit file in most cases. It helps compare options such as cash release amounts, new monthly costs, and whether consolidation is practical and cost-effective. You remain in control — you decide which proposals to progress to full application.
Next steps and compliance
Before you commit, obtain full terms, a written offer and legal advice if needed to understand total costs and contractual changes. Best Business Loans will only share your details with relevant, trusted lenders or brokers and we are transparent about our role as an introducer. Always confirm that any lender you engage is appropriately authorised if the product requires FCA regulation.
Key takeaways
- Yes — refinancing equipment can release cash or consolidate multiple agreements, subject to asset value and lender criteria.
- Choose between cash-out refinancing, consolidation or switching product type depending on your cashflow goals.
- Check early termination charges, asset valuations and tax/accounting impacts before committing.
- Use a Quick Quote to get matched with lenders and brokers who specialise in equipment finance and refinance.
Ready to explore whether refinancing your equipment is right for your business? Complete our Quick Quote and get matched with lenders or brokers who understand equipment finance and refinance options. For specialist equipment finance information and options, see our equipment finance overview at equipment finance.
Important compliance note: Best Business Loans operates as an independent introducer and does not lend money directly. We are not an FCA-authorised lender; if a product you pursue is a regulated financial service, confirm the lender’s authorisation and request full terms and disclosures. Our platform aims to be clear, fair and non-misleading in line with FCA and ASA guidance.