What if I cannot refinance my assets?
We are sometimes approached by clients who wish to refinance plant and machinery within their business. This typically relies on the assets being in sale able and usable condition. It also relies on them having adequate value.
The value used for ‘refinance’ is typically the ‘forced sale’ value. This is the value the goods would be expected to fetch at auction. From this value the lender will typically apply a 70% loan to value to arrive at a figure they are happy to lend. If you plant and machinery is unencumbered then you should be able to raise some finance.
The problem arises when you owe money on the plant and machinery and you are looking to extend the life of the agreement. In some instances the valuation of the equipment may be less than you owe. If this is the case we find that the existing lender may be willing to restructure the existing agreement. Typically they will say that they do not want to and that may well be the case. However, if there only option is to restructure or repossess the equipment and sell at a loss the likelihood is that they will restructure your existing asset finance agreement.
There are quite a few companies who specialize in refinancing assets already owned by a business. It is a specialized market and strangely it is harder to obtain this type of funding than it is to purchase new assets.
If you are looking for asset refinance please contact Funding Solutions on 0845 251 4040.