Lease Refinance

Many businesses are not aware that they may be able perform a lease refinance to raise cash to help ease their working capital requirements or to generate cash to help fund the purchase of additional equipment that they may need.

How does lease refinancing work?

In a simplistic scenario to perform a lease refinance you need to be in a position where the asset being refinanced is ‘unencumbured’. This is a legal term which essentially means that no other entity has a charge or claim over the asset in question, which normally is the position when the asset is owned outright by the business. Clearly this would not be the case as you are only part way through the existing lease and the existing finance provider will have some form of security over the asset, so a mechanism is required for the existing lease to be cleared as show below.

If an asset is already subject to a lease then the process to perform a lease refinance is for the new finance company to undertake a valuation of the asset and put forward a quote with a new payment schedule, assuming that they settle the existing lease and immediately refinance the lease without the asset leaving your business.

Our brokers have good contacts with finance providers who are willing to consider lease refinancing. Request a quote and we will determine the best equipment leasing solution for you.
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