A business operating in the transport industry recently approached us looking to raise additional working capital. With contract prices locked in until 2026 and facing ever rising costs, including higher National Insurance Contributions, the business wanted to strengthen its cash position ahead of the quieter winter months.

One option open to the business was to arrange an unsecured business loan. However, the term “unsecured” can be a little misleading as it will nearly always involve a Director or Shareholder providing a personal guarantee. This means that in the event of non-payment and the business failing, the guarantor is liable for the outstanding debt.

The team at Wise Business Finance always like to understand the assets and liabilities of a business before we make any recommendations or signpost a customer towards a particular finance product. This was underlined here as upon review, we became aware that the company owned a number of previously financed and now unencumbered vehicles. With our experience and knowledge, we knew that some of these “owned” assets that could be used to the advantage of the borrower.

We knew the asset refinance option was the correct solution and would likely mean that the Directors would not need to pledge any personal security. We approached a finance company that had a strong understanding of the customers sector and asked them to value two specific vehicles. The lender quickly came back with a positive response and confirmed they were happy to fund £140,000 against two six-year-old vehicles, releasing the required cash back into the business.

Why asset refinance made sense?

 Refinancing the vehicles instead of taking an unsecured loan provided several key benefits:

1. More competitive interest rate – because the lender had security over the assets and was lending below their fair market value.
2. No personal guarantees required – protecting the directors personally.
3. Lower arrangement fees – further reducing the total overall borrowing costs.

This approach gave the client the working capital they needed, while keeping finance costs and personal exposure to a minimum. Once an asset inspection was undertaken, finance documents were signed electronically and funds were in the business’s bank account within hours.

 If you’re in the transport sector and looking for additional capital for expansion or to fund a project, come and speak to the team at Wise Business Finance today. We can help you understand how asset refinance could work for your business.