Years of paying agreements down leaves real equity standing in a plant fleet, and most contractors only notice it when they need cash quickly.
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Equity release on plant means converting the accumulated value in construction machinery back into cash. Where machines are owned outright with nothing outstanding, a funder can buy them at an agreed trade value and hire them back, releasing the equity while the fleet stays in service. It differs from selling a machine because you keep using it, and from a bank loan because the funding follows the asset rather than the balance sheet. How much equity is available depends on what the machines would realise in the used market today.
Used kit: Yes — equity sits in older machines just as readily as newer ones, since what matters is the gap between what is owed, which is nothing, and what the market will pay.
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Business asset finance is quoted on a flat rate, so that is what this shows — with the equivalent APR underneath, because the two are not the same number. A quick guide only; your actual rate depends on the asset, term, deposit and lender.
Representative example: on Hire Purchase, borrowing £25,000 over 48 months at a 6.0% flat rate (equivalent to 11.5% APR representative), you would repay around £646 a month; total amount repayable approximately £31,000, of which £6,000 is the cost of finance. This calculator is for illustration only — it is not a quote or an offer of finance, and the rate and repayments you are offered will depend on the asset, term, deposit and your circumstances. CW Asset Finance is a credit broker, not a lender, and may receive a commission from the lender that funds your agreement. All finance is subject to status, affordability and lender approval. CW Asset Finance is an Appointed Representative of Rural Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630701).
Underwriters distinguish sharply between equity that has been earned and equity that has been assumed. Earned equity means agreements paid down on machines that have held their value; assumed equity means an owner who believes a machine is worth what it cost. The gap gets closed at valuation stage, and it is often a difficult conversation, particularly on machines that have worked in demolition, quarrying or recycling where wear is heavy. Funders verify title through invoices and PIN plates, confirm the previous agreement was settled, and usually inspect. They then examine motive, because releasing equity to invest is a very different proposition from releasing equity to survive, and only the first is fundable. Selling machines out of the business has accounting and tax consequences, so speak to your accountant before signing.
Examples of the machines we are asked to fund. This is not an exhaustive list — if what you are buying is not here, it does not mean we cannot fund it. Your supplier quote is what the agreement is written against.
| Machine | What it is |
|---|---|
| CAT 330 excavator | Thirty tonne tracked excavator |
| Hitachi ZX210-6 excavator | Owned tracked excavator |
| Volvo A30G articulated dumper | Articulated dump truck owned outright |
| JCB 540-170 Loadall | High reach telehandler |
| Liebherr LR 1100 crawler crane | Crawler crane owned outright |
| Liebherr LTM 1050 mobile crane | Owned mobile crane |
| Terex Finlay 883 screening plant | Tracked screening plant |
| Powerscreen Warrior 1400 screen | Aggregate screening plant |
| Komatsu D61PX dozer | Tracked bulldozer owned outright |
| Sennebogen 821 material handler | Waste and scrap handling machine |
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Often a plant-owning contractor at the point where the original hire purchase agreements have just finished. Monthly outgoings have dropped, the machines are fully owned, and the business wants to use that built-up value to fund an acquisition, a plant purchase or a move to a larger yard.
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Bought on hire purchase, business plant and machinery normally qualifies for capital allowances on the full cost even though you pay for it monthly, which is a large part of why hire purchase is the common structure. On a finance lease you generally set the rentals against profit instead. The rules change between budgets and your position depends on how you trade, so treat this as the direction of travel and get your accountant to confirm the detail before you commit.
Start by checking recent trade and auction results for the same model, hours and specification. That is closer to what a funder will use than any figure in your accounts, and it avoids building plans around a number that will not survive valuation.
Yes, noticeably. Machines in aggressive environments wear faster and show it, and buyers discount accordingly. Good maintenance records and evidence of rebuilt components help, but they do not fully close the gap on a machine that has worked hard.
Yes, as long as you have the auction invoice showing the purchase and can prove payment. Auction buys are common in plant and funders are used to seeing them, though the purchase price on the invoice may itself shape the valuation.
It does, because it demonstrates you have already serviced finance on that machine successfully. A funder can see a repayment record on the same asset class, which is one of the more reassuring things an underwriter can be shown.
There can be. Stripping the fleet of every available pound leaves nothing in reserve for the next opportunity or the next downturn. Many owners deliberately release part of the available value and keep some machines unencumbered.
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See everything we fund in asset refinance and sale and leaseback →
Not an offer of finance. All finance is subject to status, affordability and lender approval.
Tell us what you’re looking to fund and Conor will come back to you personally — usually the same day.
Prefer to talk? Call 07581 364281 · serving Leeds, York, Harrogate, Wakefield, Selby, Tadcaster & across North & West Yorkshire.