Asset refinance vs new borrowing

2 min read

Unlock owned kitAsset refinance

Fresh unsecuredNew borrowing

Own an asset?The decider

Releasing equity versus new funds

Asset refinance (sometimes called sale-and-leaseback or capital release) unlocks cash tied up in equipment, vehicles or machinery you already own: a financier advances against the asset's value, and you keep using it while repaying. New borrowing — an unsecured loan or line — brings fresh funds without touching your assets. Asset refinance can raise more against valuable kit, but it puts a charge over that asset; new borrowing keeps your assets clear. See asset finance.

The trade-off

	Asset refinance	New (unsecured) borrowing
Source	Equity in owned assets	Fresh funds
Security	The asset is charged	Usually nothing
Amount	Up to the asset's value	Based on affordability
Best when	You own valuable kit and need more	You want to keep assets clear

If you own valuable, unencumbered equipment and need a larger sum, asset refinance can unlock it. If you would rather not charge your assets, new unsecured borrowing keeps them free — at a rate reflecting the lack of security.

Weigh the risk to the asset

Charging an asset you rely on to trade means risking it if you cannot repay. That can be worth it for a larger sum at a lower rate, but for a modest need it is often not — keeping the asset clear and borrowing unsecured is simpler and safer. See when to pledge an asset.

The Credicorp view

If you would rather keep your equipment clear and borrow against the company's affordability instead, a Credicorp business loan gives fresh unsecured funds with no charge over your assets and no personal guarantee. For unlocking large equity in owned kit, a specialist asset refinancer may fit. Register to apply. Educational content, not financial advice.

Frequently asked questions

What is asset refinance?

Asset refinance unlocks cash tied up in equipment, vehicles or machinery you already own: a financier advances against the asset's value and you keep using it while repaying. It can raise more against valuable kit than unsecured borrowing, but it puts a charge over that asset.

Asset refinance or new borrowing — which is better?

Asset refinance suits owning valuable, unencumbered kit and needing a larger sum, since it unlocks that equity. New unsecured borrowing suits keeping your assets clear and borrowing on affordability instead. Weigh the larger sum and lower rate of refinance against the risk of charging an asset you rely on.

Is it risky to refinance an asset I use to trade?

It can be, because charging an asset means risking it if you cannot repay. For a larger sum at a lower rate that may be worthwhile, but for a modest need, keeping the asset clear and borrowing unsecured is simpler and safer. Match the choice to the size of the need and the asset's importance.