For the right customer it may now be possible to obtain asset refinancing via a high street finance company. Asset refinance has been a very specialist market up until now. But are things about to change?
Probably not but if you have a very very strong balance sheet and you are looking to refinance for positive reasons then it just may be possible. The flood gates are certainly not going to open but it is certainly worth knowing about.
Asset refinance has always been a specialist area because there are so many pitfalls from the funders perspective compared with just taking an invoice direct from a supplier. With a traditional hire purchase or finance lease transaction it is so so more complicated and an area that the high street have traditionally shyed away from.
The biggest hurdle that a finance company must overcome is obtaining an accurate value for refinancing purposes. This must be a realistic value and should the plant or machinery come back to the finance company in a forced sale this value would need to be achieved in a realistic time frame for the benefit of all concerned.
The finance company must ensure that they get good title to the equipment by ensuring that they have the necessary debenture waivers and ensuring the business can prove that the kit isn’t already on finance. Documentation is also slightly different as there is the possibility of doing the deal on sale and hire purchase back, sale and lease back or loan and chattel mortgage. Which is the best depends on the circumstances around the asset refinance and each deal can be different
