Refinancing guide · Sorbus Finance
Can you refinance or consolidate equipment and asset finance?
Quick answer
Equipment finance can sometimes be refinanced or settled as part of a consolidation, but hire purchase, finance leases and operating leases each work differently. Ownership, settlement terms and the asset itself affect what is possible. Some businesses also use owned equipment to support new borrowing. Check each agreement before assuming it can be included.
How do different equipment agreements affect refinancing?
The product type determines who owns the asset and how the agreement can end. Terms vary by provider, so treat the table as a guide to what to ask.
| Agreement | Ownership during term | What to check |
|---|---|---|
| Hire purchase | Provider until final payment and any option fee | Settlement figure, transfer of title on payment |
| Finance lease | Provider | Termination terms, secondary period, sale proceeds rules |
| Operating lease | Provider | Usually return of asset; early termination costs |
| Loan with charge over asset | Business, subject to charge | Release of charge on repayment |
Should equipment finance be included in a consolidation?
It may be more appropriate to leave an equipment agreement separate. Asset finance is tied to a specific asset through provider ownership or security rights, depending on the product. Moving that balance into a general facility can lengthen repayment or change ownership and exposure in ways that do not suit the business. Compare the actual remaining term and conditions rather than assuming either arrangement is better.
There are exceptions, such as when an asset agreement has an awkward balloon payment or when the business wants a single relationship. Compare carefully.
What is asset refinancing?
Asset refinancing usually means raising funds against equipment the business already owns outright, or replacing an existing asset agreement. Whether an asset is acceptable depends on the lender, its type, age and condition. The asset typically becomes security for the new arrangement, so the business could lose it if payments are not made.
What about balloon payments?
Some agreements end with a larger final payment. Refinancing that balance is sometimes planned from the outset. If you expect to do this, start the conversation well before the due date and check the agreement for any options it provides.
Equipment agreement review
- Agreement type and provider for each asset
- Settlement or termination figure in writing
- Who owns the asset now and at the end
- Any balloon or option-to-purchase payment
- Asset details: make, model, age, serial number
When should you not borrow to refinance?
Be candid with yourself. Refinancing is probably the wrong move if:
- Moving secured asset debt into a longer unsecured facility without comparing total cost
- Using essential equipment as security without considering the impact of losing it
Free, independent help is available from Business Debtline. Check its eligibility and remit for your business.
General information, not financial, legal or tax advice. This page explains concepts in a UK context. Whether any option is available, and on what terms, depends on the lender, the specific agreement and your business's legal structure. Sorbus Finance is a broker, not a lender. Read our initial disclosure and commission disclosure.
Frequently asked questions
Can I sell equipment that is on hire purchase?
Generally not until the agreement is settled and ownership transfers, because the provider owns it during the term. Check your agreement.
Can I add new equipment when refinancing?
Some providers can combine a refinance with new asset funding. It depends on their policy and the assets involved.
Does refinancing restart the term?
A new agreement has its own term. If it is longer than what remained, total cost can rise even if monthly payments fall.
Prefer to talk it through?
Leave your details to request a discussion about your borrowing. This form is an enquiry, not a loan application. Ask the adviser what consent and credit checks would be needed before a lender application proceeds.