What refinancing a finishing line means — and why converters do it

Finishing lines in label converting include equipment such as slitter/rewinders, laminators, varnishers, inspection systems and automatic splicers. Refinancing a finishing line means using that equipment to raise cash or replacing existing finance against it — for example by obtaining a new loan secured on the asset, selling the asset and leasing it back, or consolidating a hire purchase.

Label converters often refinance to free cash for substrates (paper, films, metallised stock), which are typically expensive, bulky and may offer bulk‑purchase discounts. Shortages, lead times and seasonal contract commitments make ready cash critical — refinancing equipment can be a rapid way to release working capital without reducing headcount or cutting production.

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Common finance options to refinance a finishing line

Asset refinance / equipment re‑mortgage

How it works: a specialist lender takes a security charge over the finishing line and lends against its market value.

• Pros: fast access to a lump sum; can replace expensive existing facilities.
• Cons: lenders apply independent valuations and advance rates fall as assets age.
• Typical use: businesses needing a one-off injection to buy substrates for a large order.

Sale & leaseback

How it works: you sell the finishing line to a funder and immediately lease it back on fixed rental terms.

• Pros: releases typically the highest immediate cash; preserves operational continuity.
• Cons: ongoing rental payments increase operating costs and long‑term cost may be higher than outright ownership.
• Best when: equipment is relatively valuable and you want the largest short‑term release.

Hire purchase refinance or buy‑out

Replace an existing HP with a lower‑cost lender or consolidate multiple HPs into a single facility to reduce monthly payments and free short‑term cash.

Asset‑based lending (ABL) and invoice finance

If the finishing line’s valuation is low, use debtor finance or stock financing to free working capital alongside equipment refinance.

Commercial property refinance or company facilities

Where property offers more security than equipment, refinancers can combine a property refinance to release larger sums for business use.

Leasing or vendor finance (for replacement/upgrades)

If you plan to upgrade the finishing line, new equipment can be financed over its working life to preserve cash.

Quick comparison:

• Lead time: sale & leaseback (fast), equipment refinance (moderate), ABL/invoice finance (fast once set up).
• Cash release: sale & leaseback (high), refinance (medium), HP buy-out (medium/low).
• Balance sheet impact: sale & leaseback (offloads asset), refinance (secured liability), ABL (additional facility).

Will lenders accept a finishing line as security? Key eligibility checklist

Lenders consider several factors when taking a finishing line as security:

• Clear title and ownership (no unresolved liens or hire purchase).
• Age, model and condition — well‑maintained, regularly used machines attract higher advance rates.
• Independent valuation (physical inspection by an appraiser).
• Trading performance: turnover, profitability and contract pipeline.
• Documentation: invoices, service/maintenance records and asset lists.
• Sector experience of management — lenders familiar with printing & label converting prefer experienced operators.

Valuation note: lenders typically lend a percentage of fair market or forced‑sale value. Illustrative advance rates commonly fall between around 20%–60% of the current market value depending on equipment type and age — example figures are indicative only.

How much cash can you realistically free up?

Amount depends on: asset valuation, outstanding finance, lender appetite and any additional security (company or property). A 3–10‑year‑old slitter might attract a modest valuation; a near‑new inspection/laminator will fetch more.

Example (illustrative): a 7‑year‑old slitter/rewinder valued at £80,000 could attract an advance of ~30% giving a gross release of £24,000 before fees and settlement of any prior finance — net cash may be lower. Sale & leaseback could release a higher figure but will create ongoing lease costs.

If equipment value is low relative to need, combine equipment refinance with invoice finance or an unsecured working capital facility.

Steps to refinance a finishing line — process & typical timings

1. Prepare documentation: asset list, proof of purchase, invoices, maintenance logs and current finance agreements.
2. Obtain an independent valuation (5–10 business days typical).
3. Contact specialist lenders or a broker who understands printing equipment (decision in 3–14 days depending on complexity).
4. Compare offers — check rates, fees, covenants, and any personal guarantee requirements.
5. Legal charge/settlement and funds release (completion 1–6 weeks depending on legal complexity).

Tip: approach brokers who specialise in printing & packaging equipment — they can speed up matching to lenders who regularly finance finishing lines.

Risks, costs and compliance — what to watch for

• Higher long‑term cost: leases and some asset funds charge higher effective rates than owning freehold equipment.
• Restrictive covenants or insurance/maintenance requirements that restrict flexibility.
• Early settlement or termination fees if replacing an existing HP.
• Impact on saleability: charged assets may deter buyers if you plan to sell the business.
• Personal guarantees: many SME facilities require them — check with lenders.

Important: submitting an enquiry is not an application. UK Business Loans will use your information to match you with suitable lenders or brokers. Representative costs vary by lender and depend on business circumstances — always check full terms before accepting an offer.

How UK Business Loans can help

UK Business Loans does not lend directly. We match label converters with specialist lenders and brokers who understand finishing lines and the printing sector. Our free eligibility check rapidly identifies which partners are most likely to offer suitable refinance options for your equipment and cash needs.

Benefits:

• Save time — one short form connects you to multiple specialist partners.
• Sector knowledge — we match you with providers experienced in printing and converting.
• Confidential and non‑binding — enquiries are used to identify the best matches and won’t affect your credit score.

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Quick checklist: Is refinancing right for your business?

• Refinance if: the finishing line still has material value, you need immediate working capital for substrates, or you want to replace high‑cost finance.
• Consider alternatives if: equipment is end‑of‑life, replacement is imminent, or existing finance agreements forbid sale/charge.
• Combine strategies: invoice finance or ABL can supplement equipment refinance if asset values are low.

FAQs

Can refinancing affect my credit rating?

Submitting an enquiry does not affect your credit score. Lenders may perform credit checks at application stage which can affect ratings — we’ll explain this during the eligibility check.

How quickly can I get funds?

Small equipment refinances can complete in a few weeks once a valuation and legal checks are complete. Sale & leaseback deals can sometimes be completed faster if documentation and title are clear.

Can I refinance equipment that’s already under hire purchase?

Possibly. Some lenders will refinance or buy‑out existing HP agreements but you should factor in any early settlement penalties.

Will I have to give personal guarantees?

Many SME facilities involve personal guarantees, but this varies by lender, deal size and company strength. Discuss options with brokers when reviewing offers.

Are there tax implications?

Sale & leaseback and other transactions can have tax consequences. Check with your accountant for advice tailored to your circumstances.

Does UK Business Loans provide finance directly?

No. We introduce you to lenders and brokers who can provide finance. Submitting a Free Eligibility Check helps us match you to the best partners for your needs.

Short case study

Anonymous example: a mid‑sized label converter used a sale & leaseback on a near‑new laminator to raise £65,000 to buy high‑grade film stock for a time‑sensitive contract. The company fulfilled the order, captured the margin on bulk pricing and repaid a portion of the lease balance within 12 months. Outcome: contract won, cashflow preserved and production uninterrupted.

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