This is a facility that enables a business to raise cash immediately, from equity in owned plant, equipment, cars or commercial vehicles, or if you have an existing finance deal it is possible to look at debt reconstruction. This can be used to either raise further funds or reduce monthly commitment.

Companies often have a problem with raising sufficient working capital for expansion, investment or cash flow issues. By refinancing existing assets, a company is able to release equity in the form of working capital into the business, whilst retaining the option of ownership.

Example: Customer has a machine on his premises purchased 3 years ago for £100k. The machine was originally financed but that finance agreement has now completed. The customer wishes to raise £50k for investment on a new product that they are developing. The customer contacts Capex Finance, who firstly arranges a valuation. The valuation is favourable as the machine is currently valued at £60k. The customer effectively sells the machine to a third party finance company that provides the customer with the £50k they require. The customer signs a new finance agreement and pays fixed monthly payments back to the finance company.

The beauty of this product is that often a business does not realise that they are sitting on assets of some value. Assets can be utilised to raise ready cash, as opposed to the traditional method of going to the bank with a view to raising the overdraft facility, which is traditionally on a variable rate basis, and payable on demand.

For reference a finance company would look at advancing 75-90% of the forced sale value of the assets. This depends on the asset itself, the condition of that asset, and the strength of the credit of the business seeking such a transaction.

Refinancing offers endless opportunities for businesses, without affecting their day-to-day banking, by providing a fixed term repayment profile, unlike an overdraft.