How Restoration Finance Works
Standard asset finance is secured against the vehicle's current value. Restoration finance recognises that a car's value changes significantly during restoration - a pre-restoration shell may be worth £20,000 but £80,000 post-restoration. Arkle Finance offers staged drawdown facilities where funds are released in tranches as work progresses and the asset value increases.
Typical Structure
- Stage 1: Initial facility agreed against pre-restoration value and restoration budget
- Stage 2: Drawdowns released at agreed milestones (bodywork complete, engine rebuilt, etc.)
- Stage 3: Final drawdown on completion; facility reviewed against post-restoration valuation
Interest is typically charged only on drawn amounts during the restoration period, converting to a standard HP agreement on completion.
Worked Example: £40,000 Restoration Budget, 1968 E-Type
| Parameter | Detail |
|---|---|
| Vehicle | 1968 Jaguar E-Type Series 2 Roadster (pre-restoration) |
| Pre-Restoration Value | £60,000 |
| Estimated Post-Restoration Value | £110,000 |
| Restoration Budget | £40,000 |
| Initial Deposit | £15,000 |
| Staged Drawdown Facility | £40,000 (4 x £10,000 tranches) |
| Lender | Arkle Finance |
| Facility Rate | 11.5% APR (indicative) |
| Post-Restoration HP | Converted at completion on agreed value |
What Lenders Need
A detailed restoration specification and itemised budget from the restorer is essential. The restorer's credentials and reputation matter - a BFRA member workshop or established marque specialist will carry more weight. The lender will also require a completion valuation estimate from an independent appraiser before the facility is drawn.