How Refinance can boost your cash flow

For many Small and Medium-sized Enterprises (SMEs) across the UK, managing cash flow is a constant balancing act. While growth opportunities abound, the capital needed to seize them isn’t always readily available. Traditional loans can be slow or restrictive, but what if your business is sitting on a valuable, untapped resource? This is where business refinancing comes in . . . a strategic financial tool that allows you to unlock capital tied up in the assets you already own, providing a powerful boost to your cash flow.

What is Asset Refinance?

Simply put, refinancing is a way to release the equity from assets your business already owns, either outright or with minimal outstanding finance. You can leverage the value of an existing asset to purchase a new asset or release capital.

Here’s how it generally works: A lender, like those we work with at Alpha Asset Finance, will purchase your asset from you (at its current market value) and then immediately finance it back to your business.

You continue to use the asset without interruption, and in return, you receive a lump sum of cash, which you then repay over an agreed period, typically with fixed monthly instalments.

Once the new agreement is complete, ownership of the asset reverts to your business (in the case of Hire Purchase) or you have options to extend or sell (with Finance Lease).

How does it differ from standard Asset Finance?

While both fall under the umbrella of asset finance, the key difference is the purpose:

Standard Asset Finance is used to acquire new equipment, vehicles, or machinery. Whereas refinance is used to release capital from assets you already own.

When is Refinance a strategic move for your business?

• Asset refinancing can be a highly effective solution in various scenarios, providing immediate financial flexibility.
• If your business is experiencing a temporary dip in cash flow, perhaps due to seasonal fluctuations, extended payment terms for large clients, or unexpected expenses, asset refinancing can provide a vital injection of funds without impacting your existing credit lines.
• Do you have a new contract or expansion plan that requires capital, but you don’t want to take on more traditional debt? Refinancing an existing asset can provide the necessary funds to invest in new opportunities, hire staff, or launch a new product line.
• If you have multiple smaller, higher-interest debts, asset refinancing can consolidate these into one manageable, lower-cost repayment, improving your overall financial health and simplifying your accounting.
• The capital released isn’t tied to the asset itself. You can use it for anything your business needs . . . from marketing campaigns and stock purchases to office renovations or staff training.
• For businesses that may struggle to secure unsecured bank loans or those seeking to preserve their traditional credit facilities, asset-backed refinancing provides a more accessible and often quicker alternative.

What assets can be refinanced?

A wide range of tangible assets can typically be refinanced, provided they hold sufficient value and are essential to your operations.

Preparing for your Asset Refinance application with Alpha Asset Finance

At Alpha, we streamline the asset refinancing process to make it as straightforward as possible for your UK SME.

To ensure a smooth application, it’s helpful to have the following ready:

• Comprehensive information about the asset you wish to refinance, including make, model, age, current condition, and original purchase details.
• Documentation proving you own the asset outright, or details of any existing finance agreements on it.
• Up-to-date management accounts, bank statements, and, if applicable, a brief business plan or explanation of how the released capital will be utilised.

Unlocking your potential with Alpha Asset Finance

Asset refinancing is a powerful, often overlooked, solution that can provide the financial agility your UK SME needs to thrive. It allows you to leverage the value already within your business, turning fixed assets into flexible capital.

If your business is asset-rich but seeking to improve cash flow, fund new ventures, or simply gain greater financial control, contact Alpha Asset Finance today.

Our experienced team understands the nuances of asset refinancing and will work with you to tailor a solution that perfectly aligns with your strategic objectives. Let us help you unlock your hidden capital and drive your business forward.