Refinancing a golf simulator to put the capital back to work

Customer situation

A leisure venue running commercial indoor golf, and an existing client we had funded before. The simulator room was already built and the equipment already paid for — but a large amount of the business’s cash had gone into it, and that cash was no longer available for anything else.

Asset required

No new asset. This was a refinance of a commercial TrackMan launch monitor and simulator setup, at around £48,000.

The challenge

Refinance only works if there is an asset a lender can actually lend against, and a simulator room is really two different things bolted together.

Most of what you see is fit-out: the bay, the joinery, the screen surround, the flooring, the lighting. That work has real cost and almost no resale value, because it cannot be removed and sold to anybody else. Lenders will not refinance it, and a business that assumes the whole room is an asset gets a disappointing answer.

The launch monitor is the opposite. It is a discrete, serial-numbered, high-value piece of equipment with an established second-hand market. That is a fundable asset.

Options considered

• Leave the capital where it was — no cost, but a five-figure sum sitting in equipment rather than in the business.
• An unsecured business loan — available, but priced against the business rather than against an asset, and it uses up borrowing capacity that has nothing to back it.
• CW Asset Finance route — refinance the identifiable equipment and leave the fit-out out of it.

The CW solution

We arranged an asset refinance facility against the simulator equipment itself, at around £48,000, and placed it with a lender comfortable with leisure assets — which is not every lender, because a golf simulator is not on most standard asset lists. The client is a limited company, so the agreement sits outside the Consumer Credit Act and was written as an unregulated business facility.

Key outcome

Around £48,000 of capital released from equipment the business already owned and continued to use, without giving up anything or taking on an unsecured loan. The venue kept trading throughout — a refinance changes who has a financial interest in the asset, not where the asset sits.

“People assume refinance means the whole installation. It does not. It means the part of it a lender could identify, value and, if it ever came to it, sell. Knowing which half of a simulator room that is before you apply saves everyone a wasted week.”

— Conor, CW Asset Finance

Every application is assessed on its own merits and all finance is subject to status and lender approval. This is one client’s outcome and is not a guide to what any other business will be offered.