Refinance is a finance facility which provides a simple way of releasing equity in unencumbered assets or assets nearing the end of their original finance arrangements. The result is a speedy cashflow boost to a customer’s working capital.
The customer invoices the sale of the assets at current market value (or slightly less) to the new finance company who then incepts a new finance agreement and the customer receives the sale proceeds less any residual finance that may have still been outstanding to the original funder.
It can also be a useful way of restructuring existing finance agreements to result in a lower monthly repayment, whilst continuing to have the use of the assets.
The new finance agreement can be either Hire Purchase or Finance Lease, depending on the customer’s circumstances, over a fixed period of time, usually a maximum of 5 years.