Quick answer
Asset refinance releases cash against equipment you already own outright, so it can lend more and cost less than an unsecured loan, but the lender registers on the PPSR and can take the asset if you default. An unsecured loan is sized on turnover, keeps the gear clear and can fund the same day for smaller amounts, but it is usually smaller and dearer. Pick refinance for size, unsecured for speed and a clean asset.
Key points
- Asset refinance and sale and leaseback both turn paid-off equipment into cash; an unsecured loan ignores the equipment and looks at turnover.
- Whether the machine is still doing the earning matters more than its value: lose it and the cash stops.
- Every refinance puts a financing statement on the PPSR, for up to five years, against the gear.
- A sale and leaseback can create taxable depreciation recovery if the price beats the asset's adjusted tax value. Ask your accountant first.
- Compare total dollars repaid and total dollars at risk, not the headline instalment.
You paid off the digger, the truck or the press years ago. It’s sitting there worth six figures, and your account is short of cash. The question is whether to hand that equipment to a lender as security (asset refinance), or ignore it and borrow unsecured on your turnover. Both can work. They fail in different ways, and the difference is mostly about what you’re willing to put at risk and how soon you need the money.
This is a different decision from equipment finance vs an unsecured loan, which is about buying something new. Here the gear is already yours.
What are your options when you own equipment outright?
There are three realistic routes to cash:
- Asset refinance. You keep legal ownership, the lender takes security over the equipment and advances a share of its value.
- Sale and leaseback. You sell the asset to a financier and lease it straight back. Ownership moves; use doesn’t.
- Unsecured loan. The lender looks at your turnover and bank statements, not the machine.
Our equipment finance page covers the purchase side; this guide stays on cash from what you hold today.
Asset refinance vs unsecured loan: how do they compare?
| Asset refinance | Unsecured business loan | |
|---|---|---|
| Sized on | Value of the asset | Turnover and bank statements |
| Typical ceiling | Can exceed what turnover alone supports | Usually $5k to $500k |
| Speed | Days; valuation can slow it | Same day possible for smaller amounts |
| Paperwork | Proof of ownership, serial numbers, valuation | Bank statements, a few months of trading |
| What’s at risk | The equipment itself, plus any guarantee | Mostly a personal guarantee |
| PPSR | Registered against the asset | Often none, though some lenders lodge a GSA |
| Cost | Often lower for the amount | Often higher for the amount |
| Best for | Larger sums, no property, strong asset | Speed, small to mid amounts, keeping gear clear |
Verdict: refinance when the amount is large relative to your turnover and the asset is easy to value. Go unsecured when speed matters most, or when losing that machine would end the business.
How much cash can you get, and how does the lender value it?
Lenders rarely advance the full value. They look at what the asset would realistically fetch in a quick sale, not the price on a dealer’s website, and lend a portion of that. Age, hours or kilometres, condition and how easy it is to resell all move the number.
Illustrative example. A Waikato contractor owns an excavator outright. The owner thinks it’s worth $120k; a valuer says a quick-sale figure is nearer $95k. The lender advances a portion of that, enough for the $50k the owner needs for wages and a materials deposit. These figures are made up to show the logic, not a quote. The point: the headline value and the lendable value are different numbers, so ask for both.
An unsecured lender wouldn’t care about the excavator at all. It would ask what the business turns over each month, and size the loan on that. If turnover is strong, $50k may be easy. If it’s patchy, the asset is what makes the loan possible.
What does it cost in dollars?
Don’t compare headline prices; compare the totals. Our guide on how to compare fast business loan quotes has the worksheet. Here’s the shape using invented numbers for a $50k advance:
| Asset refinance | Unsecured loan | |
|---|---|---|
| Amount received after fees | $48,500 | $48,000 |
| Term | 24 months | 12 months |
| Total repaid if all goes to plan | $57,000 | $60,000 |
| Monthly payment | $2,375 | $5,000 |
| What you’d lose if payments stop | The excavator | A personal guarantee claim |
Assumed for illustration only. Real quotes vary widely; get yours in dollars.
The trap is the monthly payment. The refinance looks gentler because it runs twice as long, and it often is cheaper overall here. But if the business only needs the cash for four months, a shorter loan you can repay early without a large exit fee may beat it. Check the early repayment terms before signing either one.
What happens on the PPSR?
When you refinance, the lender registers a financing statement on the Personal Property Securities Register, linking its security to your business and the asset. The Companies Office says a financing statement can be registered for a maximum of five years and can be renewed or discharged.
Three practical points:
- Search before you apply. A debtor search shows what’s already registered. An old finance company’s registration on a machine you paid off years ago can stall everything until it’s discharged.
- Ask for the discharge in writing once you’ve repaid. The register’s own guidance notes that live registrations can affect your ability to raise funds.
- Mind your bank’s GSA. If your bank holds an all-assets security, a second lender registering over the same asset usually needs the bank’s consent. Our guide on getting a second loan with a bank GSA explains the sequence.
What about a sale and leaseback?
It releases cash without a loan, which feels simple. The catch is tax. Inland Revenue says selling a depreciated asset for more than its adjusted tax value creates a profit that goes into your return as income, and the adjustment lands in the year you sell. Equipment you’ve depreciated heavily may have a low tax value, so a sale near market value can create a taxable gain you didn’t plan for.
Ask your accountant how both that and GST apply to your sale before you commit; this guide doesn’t try to settle it. If the numbers look uncomfortable, a refinance (where you don’t sell) avoids the question.
Ready to see what your equipment could unlock, and what an unsecured option would look like next to it? Check your options.
Which situation points to which option?
- Large sum, thin turnover, good asset: refinance.
- Small sum, need it today: unsecured. Same-day funding is possible for smaller unsecured amounts, and an asset valuation can add days.
- The machine is the business (one truck, one digger, one press): lean unsecured, or a modest refinance, because defaulting on a refinance means losing your income engine.
- Need to keep the asset debt-free for a sale or a future purchase: unsecured.
- Bank holds a GSA: compare which route needs consent. Property-backed options sit outside it; see secured vs unsecured.
- Part of a bigger plan to buy new kit: Investment Boost timing can change which route makes sense.
You can also use the fast funding comparer to rank options for your situation. business.govt.nz’s borrowing guidance recommends working out what you need and can afford to repay first, which is the right starting point here too.
What should you have ready before you ask?
A little preparation turns days into hours, whichever route you pick:
- Proof the asset is yours: the purchase invoice, registration papers for vehicles, and serial or chassis numbers for machinery.
- A PPSR debtor search result showing what’s registered against the business, so nothing surprises you mid-application.
- Recent service records and photos. Condition drives the valuation, and a well-kept machine values higher than a tired one.
- Three to six months of bank statements, which every unsecured lender will want and a refinance lender will usually still look at.
- A clear exit: how and when the money comes back in, whether that’s a customer payment, a season’s income or a sale.
If the deadline is a day or two away, say so up front. It changes which option is realistic.
What mistakes cost owners the most?
- Using the sticker value as the loan amount. Lenders use a quick-sale valuation.
- Refinancing the one asset you can’t operate without, to fund a problem that is temporary.
- Forgetting the PPSR discharge after repaying, then finding it blocks the next loan.
- Comparing monthly payments across different terms. Total dollars repaid is the honest figure.
- Stacking. Refinancing gear and then taking an unsecured loan on top can leave you with two repayment streams. See loan stacking.
Own the gear and need cash? Let’s work out which route fits
Owning your equipment outright is a real strength, and most owners we talk to underestimate it. Whether it’s best used as security or kept clear depends on the amount, the deadline and how much you need that machine every day.
Enquiring takes about 60 seconds, and your credit file isn’t touched just for asking. We won’t send your details out to a stack of lenders; one person reads your situation and calls you with the options that fit. When you fill in the form, please be accurate about what you own, what’s already registered against it and how much you need, so we can match you to the right option first time.
Frequently asked questions
What is asset refinance for a business?
It's a loan secured on equipment, vehicles or machinery your business already owns outright. The lender values the asset, advances a percentage of that value, registers its security on the PPSR and you keep using the gear while you repay. Once repaid, the registration is discharged.
Is asset refinance the same as sale and leaseback?
No. With asset refinance you stay the legal owner and the lender holds security over the asset. With a sale and leaseback you sell the asset to the financier and lease it back, so ownership moves. That difference can change the tax treatment, so talk to your accountant before choosing the sale route.
Is asset refinance cheaper than an unsecured business loan?
Often, because the asset reduces the lender's risk, but not always. Fees, term and valuation costs all count. Work out the total dollars repaid on each quote, then add the cost of your risk: with refinance, a missed run of repayments puts the equipment itself on the line.
Can I refinance second-hand or older equipment?
Sometimes. Lenders usually want equipment that holds resale value, has clear ownership and is easy to value, such as trucks, diggers, tractors and workshop machinery. Very old, specialised or heavily customised items are harder. A valuation or inspection is commonly part of the process.
How do I check nobody else has security over my equipment?
Run a debtor search on the Personal Property Securities Register under your business name and any serial-numbered asset. If an old finance company or bank still has a live registration, a new lender will see it and may want it discharged or consented to first.
How fast can I get cash from equipment I own?
It depends on the valuation. Where the asset is easy to value, days is realistic; if an inspection or a bank consent is needed, longer. Same-day funding is possible for smaller unsecured amounts, which is why owners with a deadline sometimes start there and refinance the gear later.