So, what exactly IS refinancing?

Put simply, refinancing is releasing capital tied up in assets to free up cash to use elsewhere, or simply to improve cash flow over time. You still have full use of the asset and still own it at the end of the term. As the name suggests, it can be used even if you have existing finance with another provider, e.g. an existing hire purchase agreement.

It can be a cost-effective and flexible way to release cash but it needs to be approached carefully. No two refinancing needs are the same, this is where our expertise comes in.

Below we’ve answered some of the questions we’re asked the most, but it’s just the start. Get in touch to have a more in-depth chat about your refinancing needs.

Is there a maximum amount I can raise?

Typically, lenders provide a maximum of 80% of the trade value of the asset, but if you need more there are options we can explore. We judge each situation on its own merits, there are many variables. For example, to take the LTV ratio higher, we could consider an accelerated payment profile, which is where you pay more at the start of the term. The key is knowing which funders to approach.

What about approaching funders?

Funders vary hugely and their appetite for refinancing can differ depending on a number of variables e.g. industry, age of asset. We’ll assess your business and the assets involved before considering which funders to approach. There’s no magic number to go to, rather we make sure to approach the right people. Our experience and understanding of this market means we have a depth understanding of the lending profiles of a variety of funders.

How long does it take?

It really depends. (Did we mention that each set of circumstances is different?) One of the key variables is valuation; if the asset is straightforward to value, then we can get going really quickly, but if it’s more complex, that can add a bit of time. The more detailed documentation about your assets, the better. In general, we say timescales are between 1 and 3 weeks.

What if I want to settle early?

There are possible options if your circumstances change over the course of the refinance, we can take you through them, just get in touch.

Refinancing can be a great option, but you need a safe pair of hands to walk you through it. This is where your broker comes in. Understanding the market, the funders and their individual profiles gives you the best chance of a strong deal.

For more info, get in touch with Duncan Wood who can advise you.