Can I refinance existing plant and machinery to release working capital?
The short answer, what it is, and when it works
Yes — many UK funders allow you to refinance existing plant and machinery to unlock cash tied up in those assets. This is often called asset refinance, sale-and-leaseback, or capital release against unencumbered equipment. It can be a fast way to boost working capital without selling equipment or diluting equity.
In practice, a lender takes security over qualifying assets you already own, then advances a percentage of their value as a loan or lease. Repayments are spread over an agreed term, usually aligned to the asset’s remaining useful life. Once the facility is repaid, the security is released.
This route can suit established, asset-rich businesses in manufacturing, engineering, construction, print, logistics, food processing, automotive, agriculture, and similar sectors. It can help ease cash flow pressures, fund growth, or consolidate more expensive short-term borrowing. It’s not typically available for start-ups, assets with unclear ownership, or items already under finance without a viable settlement route.
How refinancing releases working capital
By securing funding against equipment you already own, you convert a balance-sheet asset into cash while continuing to use it daily. That cash can support payroll, supplier payments, stock purchases, or new projects. Unlike an overdraft, the facility is linked to a tangible asset’s value, which can make pricing more predictable.
Which assets usually qualify
Commonly accepted examples include CNC machines, lathes, milling centres, presses, laser cutters, injection moulders, forklifts, yellow plant, agricultural machinery, commercial kitchen equipment, print presses, packaging lines, and commercial vehicles. Lenders typically prefer mainstream brands, good service history, and assets that are sellable in an established secondary market. Items need to be identifiable (serial numbers/VRMs) and in working order.
Typical amounts, terms, and LTV
Advance rates vary by asset class, age, condition, and resale market, but funding commonly ranges from c.50% to 80% of an independently assessed value. Terms are typically 12–60 months, sometimes longer for heavy plant with long life cycles. Final offers, eligibility, and pricing always depend on the provider’s credit assessment.
Eligibility, valuations, and what lenders look for
Eligibility usually hinges on asset quality, business stability, and clear title. You’ll typically need to be a UK-registered company with at least 12–24 months of trading and demonstrable revenues. Sole traders and very early-stage businesses are less likely to qualify through mainstream asset finance providers.
Assets must be unencumbered (owned outright) or have a manageable settlement figure if currently financed. Where there’s existing finance, lenders may “refinance the refinance” by settling the old agreement as part of the new facility. Strong provenance (invoices, maintenance records, and proof of ownership) helps speed approval.
Valuation approaches
Lenders commonly use desktop valuations, in-person inspections, or independent RICS/industry valuations depending on deal size and asset type. The advance is linked to a pragmatic value (e.g., forced-sale or wholesale market value). Expect conservative assumptions for highly specialised or niche equipment.
Documents you’ll usually need
- Asset list with makes, models, serial numbers, age, and condition notes.
- Ownership invoices, V5s for vehicles, and any service or inspection records.
- Latest management accounts, filed accounts, bank statements, and aged debtor/creditor summaries.
- Business overview and the intended use of funds (e.g., working capital, stock, project mobilisation).
Some providers may request director guarantees or debentures, especially for higher advance rates or weaker credit profiles. Security varies by funder and deal structure; always review terms carefully before you proceed.
Who is likely to qualify
Asset-backed trading businesses with tangible equipment, stable revenue, and a clear plan for the funds are prime candidates. Sectors like manufacturing, engineering, construction, and logistics often meet these criteria. Better credit and robust financials generally unlock sharper pricing and higher loan-to-value bands.
Cost, risk, and how to compare offers fairly
Asset refinance pricing includes interest and, typically, documentation, arrangement, and valuation fees. Effective cost depends on asset type, deal size, term, and credit profile. Because the facility is secured, pricing can be more favourable than unsecured cash flow borrowing, though this varies by case.
Common fees and interest
- Interest: fixed or variable, often aligned to asset life and risk profile.
- Arrangement and documentation fees: sometimes added to the facility.
- Valuation or inspection costs: desktop or physical, depending on assets.
- Settlement fees or early repayment charges: check your agreement.
Always assess the total cost of ownership, not just the monthly payment. Ask for an APR or equivalent where relevant to compare different offers on a like-for-like basis. Ensure you understand security, guarantees, and any balloon or final payments.
Key risks to consider
- Security: the lender can take possession of the financed equipment if you default.
- Asset depreciation: advance levels account for depreciation, which can limit funding headroom.
- Cash flow: ensure repayments align with your trading cycle to avoid strain.
Facilities should be clear, fair, and not misleading. If a rate looks unusually low, check for large fees, restrictive covenants, or mandatory add-ons that alter the true cost. Seek independent professional advice if you are unsure.
How to compare offers
- Compare advance amount, term, interest, fees, and security on a single summary sheet.
- Check speed to fund, valuation requirements, and any conditions precedent.
- Verify flexibility: overpayments, settlement options, and asset substitutions if needed.
The process and timelines — from enquiry to funds
The route to funding is generally streamlined, especially for standard, well-known asset types. Many businesses complete the process within 3–10 working days once valuations and documents are in order. Larger or more complex assets can take longer.
Step-by-step process
- Initial enquiry and indicative quote based on your asset list and business profile.
- Document collection and credit assessment, including valuation approach confirmation.
- Formal offer issued with terms, fees, and security detail for your review.
- Legal and settlement process (if existing finance is being cleared) or security registration.
- Funds released to your business account, typically via same-day transfer once conditions are met.
Being organised with asset records and financials can materially speed up funding. Providers may conduct site visits for high-value or specialist machinery. Clear communication about the use of funds helps demonstrate prudence and purpose.
Alternatives if refinance isn’t the best fit
- Invoice finance: unlock cash tied up in receivables to smooth working capital.
- Asset-based lending: blend receivables, inventory, and plant into a broader facility.
- Equipment finance for new purchases: preserve cash by spreading cost of new assets.
- Unsecured working capital loans: faster for smaller amounts, but usually higher cost.
Each option serves different needs, eligibility profiles, and timeframes. The right solution depends on your sector, balance sheet, and cash flow. Many businesses combine products for resilience and flexibility.
Time to cash and practical tips
- Share clear photos, service logs, and serial numbers to reduce valuation queries.
- Pre-prepare financials and bank statements for smooth credit assessment.
- Explain seasonal cycles so repayments fit your pattern of receipts.
How Best Business Loans can help you find providers
Best Business Loans is an independent introducer platform that connects established UK businesses with suitable lenders or brokers. We don’t offer loans ourselves — we help you explore relevant options quickly and clearly. Our AI-led process and network save you time and effort.
Why use our platform
- AI-driven matching: your profile is matched to providers active in your sector and asset class.
- Breadth of options: compare routes such as asset refinance, invoice finance, or equipment funding.
- People-first support: transparent, no-obligation, and designed to be clear, fair, and not misleading.
If you operate in engineering, fabrication, or production, you may also wish to explore our guide to manufacturing business loans. It covers common funding options for capital equipment, tooling, and cash flow management. Cross-referencing products can help you choose the best-fit route for your goals.
What to expect when you enquire
- Complete a Quick Quote form — it takes a couple of minutes.
- Our system analyses your details and suggests suitable funding paths.
- We introduce you to relevant providers who may be able to help.
- You compare terms and decide what’s right for your business.
Your enquiry is free and there’s no obligation to proceed. Providers will conduct their own underwriting and may request additional information. Offers, eligibility, and rates depend on your circumstances and provider criteria.
FAQs about refinancing plant and machinery
Can I refinance assets I’m still paying for? Potentially — the new facility may settle your existing agreement if the figures stack up. You’ll need a current settlement statement and sufficient equity in the asset. Final approval depends on the provider’s assessment.
How much can I raise? Advance levels commonly range from c.50% to 80% of an assessed value, subject to asset type and credit. Higher-risk or niche assets may result in lower advances. Each provider sets its own limits and criteria.
How fast can funds be released? Straightforward cases can complete in 3–10 working days after valuation and document completion. Complex assets or large multi-asset schedules may take longer. Fast responses to queries help shorten timelines.
Will refinancing affect tax or capital allowances? Tax treatment depends on structure and your circumstances. For example, sale-and-leaseback and HP/loan structures can be treated differently for accounts and tax. Always consult your accountant for advice tailored to your business.
What happens if I miss repayments? Because the facility is secured, the provider can seek to recover the equipment and any shortfall under the agreement. Make sure repayment schedules are affordable under realistic trading conditions. If in doubt, ask the provider to model different repayment scenarios.
Important compliance information
Best Business Loans is an independent introducer and does not provide loans or financial advice. Any introduction we make is to third-party lenders or brokers who will assess eligibility and pricing. All financial promotions are intended to be clear, fair, and not misleading; always read full terms before you commit.
Funding is subject to status, affordability, and provider criteria. Security may be required, including charges over assets and personal or director guarantees in some cases. Late or missed repayments can have serious consequences for your business and may result in the repossession of secured assets.
We recommend businesses seek independent professional advice on tax, accounting, and legal considerations. Guidance in this article is general information for UK trading companies and may not reflect your specific circumstances. Updated October 2025.
Key takeaways
- Yes — you can refinance existing plant and machinery to release working capital if the assets, business profile, and valuations meet provider criteria.
- Typical advance levels are linked to asset value and risk; terms often run 12–60 months.
- Ensure you understand total costs, security, and repayment impact before proceeding.
- If refinance isn’t ideal, consider invoice finance, asset-based lending, or new equipment finance.
- Use Best Business Loans to be matched with suitable UK providers quickly and with no obligation.
Next step: Want to explore refinance against your machinery? Complete a Quick Quote on our site and we’ll introduce you to relevant providers so you can compare options and decide with confidence.