Part of: Van Finance
Releasing capital
Refinancing vans you already own
If your business owns its vans, asset refinance can turn part of their value into working capital. The lender takes ownership and the vans stay on the road.
- An enquiry, not an application
- New and used vans
- Ownership and VAT explained
Asset refinance, sometimes called sale and hire purchase back, lets a business raise money against vans it owns. In simple terms, the lender buys the vans from the business and the business buys them back over an agreed term through a hire purchase style agreement. The vans keep working throughout.
It can help when a business has value tied up in its vehicles but needs cash for growth, a contract, stock or to smooth a seasonal dip. It is still borrowing, and it is secured on vans the business depends on, so it needs the same care as any other finance.
The lender must be satisfied it can take clear ownership of each van. That means checks on title, the vans' condition and value, and settlement of any finance already on them.
Who this suits
Asset refinance suits businesses with owned vans of reasonable age and value and a clear use for the funds.
- Businesses that bought vans outright and want to release capital
- Businesses near the end of existing finance with equity in the vans
- Operators funding a new contract or seasonal costs
- Businesses consolidating several small agreements into one
What lenders look at
The lender values the vans and decides how much it will advance against them. It confirms the business owns them, checks for outstanding finance, and may inspect the vans or ask for photographs and documents. It also assesses the business's ability to make the new payments.
- Proof that the business owns each van, such as purchase invoices
- Vehicle history checks for outstanding finance and write off records
- Inspection, valuation or condition evidence
- Age and mileage now and at the end of the new term
- Affordability and the purpose of the funds
What you will need
Gather these before applying so the lender can confirm ownership quickly.
- Purchase invoices or other proof of ownership for each van
- V5C registration documents
- Settlement figures for any existing finance on the vans
- Recent business bank statements and accounts
- A short explanation of what the funds are for
Typical structure
The lender pays the agreed amount, first settling any existing finance on the vans, with the balance released to the business. The business then repays over a fixed term, after which ownership passes back. Some agreements include a balloon, with the same caution that applies to any balloon.
VAT and tax on a refinance can be different from a straightforward purchase, and the outcome depends on how the transaction is structured and your circumstances. There is no automatic tax benefit. Your accountant must review the transaction before you proceed.
Check the cash released, not just the headline advance
Start with the amount you need for the business purpose. The lender values the van independently, so its advance may differ from the price you originally paid or an advertised retail value. If existing finance must be settled, subtract the settlement figure and any disclosed fees from the proposed advance. The remainder is the cash actually available to your business. Ask for that calculation in writing before comparing offers.
Keep the funding term consistent with the van's remaining working life. A lower monthly payment over a longer agreement may increase the total cost and leave payments due when the vehicle needs replacement. Consider maintenance, insurance and downtime alongside the new commitment. Releasing money from a working van also means that missed payments could put an asset the business relies on at risk.
Ownership checks matter even when a van has been in your fleet for years. Supply the original purchase invoice, any finance agreement and a current settlement statement where relevant. A vehicle registration certificate is not proof of legal ownership. Tell the broker about modifications, damage, specialist equipment and any change of business ownership, rather than assuming these details will not affect the lender's decision.
Common mistakes
These cause delays or regret with van refinance.
- Not having proof of ownership to hand.
- Forgetting existing finance that must be settled first.
- Refinancing vans that will be too old by the end of the new term.
- Raising money without a clear use for it.
- Assuming a tax advantage without checking with an accountant.
Official sources
Rules, eligibility and availability change. Check the current position here before relying on it.
Sole traders and partnerships
If you are a sole trader, a partnership of two or three partners, or an unincorporated body, some finance agreements may be regulated under the Consumer Credit Act 1974. A regulated agreement carries extra protections and different paperwork. Whether yours is regulated depends on the amount borrowed, the purpose and any exemptions that apply. We will tell you before you proceed, and the lender will confirm it in the agreement.
Questions we are asked
What is van refinancing?
Asset refinance lets a business raise money against vans it owns. The lender buys the vans and the business buys them back over a term while continuing to use them.
Can I refinance a van that still has finance on it?
Often yes. The existing finance is settled from the new advance and any balance is released.
Will the lender inspect the vans?
Many lenders will inspect or ask for photographs, documents and valuation evidence before agreeing.
Is there a tax benefit to refinancing?
Not automatically. The VAT and tax effect depends on how the transaction is structured. Your accountant must review it.
How much can I release?
It depends on the lender's valuation, the vans' age and mileage and the business's affordability. We do not quote amounts in advance.
Related van finance guides
Your business circumstances
Compare finance structures
VAT and releasing capital
This page is general information, not tax, accounting or legal advice. Tax and VAT treatment depends on your circumstances and can change. Speak to your accountant before choosing a structure. Finance is subject to status and lender approval.
Who you are dealing with
A broker, regulated, and clear about it
Sorbus Finance Limited is an appointed representative of Moorgate Finance Limited, which is authorised and regulated by the Financial Conduct Authority (firm reference number 662419). We are a credit broker, not a lender.
We work with a panel of lenders that includes high street banks, specialist asset finance lenders and manufacturer linked finance houses. Each has its own criteria, so part of our work is matching your business to the lenders likely to say yes, rather than applying everywhere.
Not all commercial finance activities or agreements are regulated by the Financial Conduct Authority. Regulatory protections depend on the activity, agreement and customer circumstances.