When a company needs to keep hold of its working capital then some companies opt to use asset finance leasing. The lease of an asset means that the company uses the asset and pays the lessor a regular payment to sue it. The lessor keeps ownership of the asset. High value capital assets are often leased in the transport, manufacturing and construction sectors. There are two kinds of Asset Finance, Direct Leasing and Sale and Leaseback. In the former case the company looks for the asset it wishes to purchase and then the Asset Finance Company will buy it for them. In the second instance the Asset owned by the company is sold to the lessor and then rented back.

Asset Finance is a service used when purchasing assets, but Asset Refinancing is not as well known to businesses. If a company has already bought high value assets such as property, machines or technology for the company it is possible to sell them back to a leasing company who will then pay you back for the current asset value. The business can then continue to use the asset in the same way but then pay the lessor regular payments for them.

Asset Refinancing involves an agreement drawn up between the business and the lessor, with agreements made to repay usually over a fixed time period at monthly or quarterly intervals usually at a fixed rate of interest.

Asset refinancing can free off capital for a business investment opportunity or weather problems caused by a bad dept. Of course, there is an interest charge attached to the agreement and the company will always pay more than the original cost of the asset though it could be a fairly low cost way to raise money for the business.