Asset refinance: unlock cash parked in your gear

Walk around most established New Zealand businesses and you’ll find money parked in plain sight: a fleet of paid-off utes, a forklift, an excavator, a commercial kitchen, a printing press. Those assets keep working every day, but the cash that bought them is locked up. Asset refinance unlocks some of that value without selling anything — and in a funding remix, it’s often the piece that funds the deposit on the next big step.

How does asset refinance work?

There are two common structures:

1. A loan secured on the asset. The lender advances funds against the asset’s value and registers a security interest over it, usually by filing a financing statement on the Personal Property Securities Register. You keep ownership and use, and repay over an agreed term.
2. Sale and leaseback. You sell the asset to a funder for a lump sum and lease it back. You keep using it, pay lease instalments and, depending on the agreement, may buy it back at the end.

Either way, the asset stays in your yard, workshop or kitchen, still earning money.

Which assets are easiest to refinance?

Asset type	Refinance appeal	Why
Utes, vans, light trucks	High	Strong resale market, easy to value and move
Heavy trucks and trailers	Good	Established second-hand market
Forklifts, loaders, excavators	Good	Mobile and widely used
General workshop machinery	Moderate	Value depends on brand and condition
Specialised production lines	Lower	Small resale market, costly to remove
Fit-out, computers, furniture	Low	Little resale value

Lenders value assets conservatively, thinking about what they’d get if they ever had to sell. Age, hours, condition and service history all matter.

When does asset refinance beat other pieces?

• No property to use, or you’d rather not. Refinance gives a secured option without putting a house on the line.
• The goal is tied to more gear. Releasing cash from existing equipment to fund the deposit on new equipment keeps the whole project in the equipment world.
• Cash is tight but assets are strong. A business that has paid down its fleet over years has built up value it can access.
• Your bank wants more security than you’ll give. Asset-backed funding can be ring-fenced to specific items.

It’s less suitable when the assets are old or specialised, when you’ll need to sell them soon, or when the cash need is small enough for a buffer facility.

What does it cost you, beyond the price?

• Encumbered assets. Once registered as security, an asset can’t be sold freely until the security is released, and other lenders will see it on the PPSR.
• Insurance requirements. Funders usually require the asset to be insured with their interest noted.
• Tax effects of a sale and leaseback. Selling a depreciated asset can create taxable income if the price is above its adjusted tax value, and the sale may involve GST. Inland Revenue’s depreciation guidance explains the profit-on-sale rule; get your accountant to check before you choose this structure.
• Term mismatch. Repayments should end well before the asset wears out.

Illustrative example: a Manawatū transport depot

Illustrative only; no real business.

A Palmerston North freight business owns six paid-off trucks, two forklifts and a yard full of racking. It wants to fund a $150,000 deposit on a new chilled warehouse lease and fit-out. Rather than using the owners’ home as security, it refinances three of the trucks and both forklifts, releasing about $120,000. The owners add $30,000 of retained profits. The trucks keep running the same routes, and the home stays out of the deal.

If you’re weighing asset refinance against other options, ask a real person to compare them — enquiring doesn’t involve a credit check.

How does asset refinance fit with other funding?

Because asset refinance registers security over specific items, it can interact with any general security a bank holds over “all present and after-acquired property”. Before refinancing, check what’s already on the PPSR and whether your existing lender needs to consent or release the assets. Our guide on who ranks first when you mix funding covers this.

If you have gear you’re no longer using at all, selling idle assets may beat refinancing them. And if the goal is buying new equipment, see equipment finance vs a business loan and the equipment remix. For mixing asset-backed and unsecured funding, see secured plus unsecured.

What should you prepare?

• A list of the assets: make, model, year, serial or registration numbers, hours or kilometres.
• Proof of ownership and confirmation they’re free of existing finance.
• Recent service records and photos.
• Business bank statements and what the released cash is for.

How is the asset valued?

Lenders don’t use what you paid or what the asset is worth to you. They think about what it would fetch if they had to sell it. Expect them to consider:

• Age and hours or kilometres — the main drivers for vehicles and plant.
• Condition and service history — documented maintenance supports value.
• Brand and model — mainstream makes with dealer networks resell more easily.
• Mobility — something that can be loaded on a truck is easier to recover than something bolted into a building.
• Market depth — how many buyers exist for that item in New Zealand.

Some lenders use desktop valuations from industry data; others ask for a valuer’s report on high-value items. The advance is usually a portion of that conservative value, not all of it.

Ready to put your gear to work twice?

If refinancing assets could fund part of your goal, tell us about the assets and the gap. There’s no credit check to start, your enquiry stays with one real person rather than being blasted to lenders, and we’ll talk it through. Accurate asset details on the form help us suggest the right structure first time.