Article originally published in NAFBC’s Commercial Broker Magazine Q2 2026
Forgetting that existing assets hold value could mean missing a useful tool for business owners. In an asset finance context, refinancing means raising funds against equipment or vehicles a business already owns, either to replace existing borrowing, restructure it or to simply generate working capital.
Growth is a recurring trigger in many conversations I have with brokers. Expansion demands cash before the revenue and most importantly profit is generated: for recruitment, expansion, extra vehicles, longer production runs, or taking on a larger contract. Where a client has unencumbered assets, refinance can convert balance sheet value into liquidity, allowing them to act at the moment the opportunity is real, rather than when retained cash finally catches up.
Another strategic use is refinancing in an evolving-rate environment. When market pricing eases, clients can sometimes replace older, higher-priced agreements and potentially reduce their monthly outgoings. It can also be an opportunity to combine multiple facilities with different lenders, different end dates and different repayment profiles into something easier to manage. However, it’s always best to check which option is better in the long run and consider the impact of any potential early settlement fees.
Then there’s seasonality – fronting costs that land before peak trading. Stock, materials, and overheads can all create a short, sharp cash pinch in otherwise healthy businesses. Refinance can bridge that gap by turning existing assets into working capital, helping to trade through the busy period rather than rationing growth because of timing.
I regularly see refinancing of unencumbered assets being used to support “development” costs that don’t sit well in traditional asset finance products: building works, fit-out, professional fees, premises enhancements or alterations. Or in multi-part asset builds where, for instance, the chassis, body and attachments of a vehicle are sourced separately, maybe even from different countries. Short-term funding can help secure the components quickly, then refinance the finished asset into one clean agreement that’s easier to manage.
One point I’d urge brokers to really focus on is the client expectation vs the asset valuation. Refinance stands or falls on their customers having realistic expectations of the valuation of the assets they want to refinance. Working closely with your lender and using industry experts and specialist valuers with experience in the assets in question ensures you achieve the right valuations quickly enabling you to keep the risks proportionate and confidently structure a solution that works for both the lender and the customer.
Refinance works best when it’s considered early, not when cash is already tight. With NACFB Member brokers originating £33bn in SME lending last year, they are often closest to the day-to-day pressures clients feel, so it pays to ask one extra question in every review: “What assets do you already own, and what could they do for you?” Done properly, refinancing can release capital, smooth repayments and simplify complex positions. Make it part of your toolkit from today.
