Asset Refinancing: How to Unlock Cash from Equipment You Already Own
Finn Murphy
Relationship Manager · May 16, 2026 · 6 min read
Asset refinancing, often called a sale-and-leaseback, allows a UK business to release cash from equipment or vehicles it already owns. The business sells the asset to a lender, which immediately leases it back, giving the business continued use of the asset while receiving a cash injection. For businesses with owned assets and an immediate cash need, it is often the fastest and most cost-effective route to liquidity.
How sale-and-leaseback works
The business identifies assets it owns outright or with low remaining finance balances. A lender values those assets and offers to purchase them at an agreed price, which reflects their current market value. Simultaneously, the lender leases the assets back to the business at an agreed monthly rental. The business receives the purchase price as a cash lump sum on day one and continues to use the assets as before. The lease term typically matches the remaining productive life of the asset, from 1 to 7 years.
The amount released depends on the asset type, age, condition, and current market value. For commercial vehicles in good condition, lenders may advance 70-90 percent of market value. For older or more specialised assets, the advance rate may be lower. The cash released can be used for any business purpose, including working capital, funding growth, paying off higher-cost debt, or seizing a time-sensitive opportunity.
Which assets can be refinanced?
Almost any asset with a determinable market value can be considered for refinancing. Commercial vehicles, lorries, vans, and cars are the most commonly refinanced assets because they have strong secondary markets and predictable depreciation curves. Construction plant, agricultural machinery, manufacturing equipment, and medical or dental equipment are all regularly refinanced.
Lenders are more cautious about highly specialised assets with a limited market of potential buyers, or assets that are physically integrated into a building (though some lenders will consider this with appropriate legal structuring). IT equipment is typically only refinanceable if it is relatively recent and has a meaningful secondary market value.
"For businesses that have invested in quality assets over the years, those assets represent a source of liquidity that is often faster and cheaper to access than a new unsecured loan."
- Finn Murphy, Relationship Manager, Spark Finance
Tax and accounting treatment
A sale-and-leaseback results in a disposal of the asset for tax purposes. If the asset has been fully depreciated in the accounts but still has a real market value, there may be a taxable profit on disposal. Conversely, if the asset's book value exceeds the sale price, a loss on disposal may arise. Always review the tax implications with your accountant before proceeding.
For accounting purposes, the asset is removed from the fixed asset register and replaced by a lease liability under IFRS 16 or FRS 102 (as applicable). This changes the balance sheet structure but does not affect the business's actual use of or control over the asset. Some business owners refinance assets ahead of a funding application specifically to improve their balance sheet ratios.
Is asset refinancing right for your business?
Asset refinancing is well-suited to businesses that have built up a portfolio of owned assets over time and now need cash for growth, an unexpected cost, or to take advantage of an opportunity. It is particularly effective when the cost of releasing the equity through refinancing is lower than the cost of an unsecured working capital loan.
It is less appropriate when the assets are needed as security for an existing lending facility, when the total cost of the leaseback is significantly higher than the value of the cash released, or when you are planning to replace the assets in the near term anyway. Spark Finance can model the total cost of a refinancing transaction against alternatives so you can make an informed comparison before committing.
The bottom line
Asset refinancing through Spark Finance typically takes 2-5 business days from application to cash receipt. We work with specialist lenders who understand a wide range of asset types and can value and fund even complex transactions quickly. To find out how much cash your assets could release, apply at apply.sparkfinance.co.uk.
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