Finance For Buying Liquidated Assets

As a director, you’ll know which assets are most crucial to your business’ success. In the event of liquidation, being able to reclaim these assets can help you launch something new or recoup maximum value from a bad situation. 

During liquidation, your assets will be sold after a professional valuation to repay creditors with the largest payments possible. You can buy these assets from the liquidator yourself, rather than allowing them to be resold elsewhere. 

Unfortunately, you have to wait until the liquidation is in progress, or you may be viewed as trying to worsen the position for the creditors by buying an asset under its actual value. A liquidator will look into a company’s history for up to two years before insolvency to identify this type of sale. This is known as ‘transactions at undervalue’ and liquidators can either reverse the transaction or recover the asset. 

The strength of buying a liquidated asset is all about experience. You, as a member of the business, know the true value of an asset and can assess this against whatever valuation is given to decide if it’s worth pursuing. 

If, for example, you were a Director in an ecommerce business, you may want to purchase the warehousing hardware that enabled you to ship orders so effectively. Its long-term value to your potential new venture will outweigh any initial cost, even if the valuation is high. 

However, you’re unlikely to be in a good cashflow position when a previous company is being dissolved and you’re looking to start a new business. To buy the assets you need to make sure you succeed, you’ll need to find finance. 
 

When is buying back a good idea?

• If you have training on a specific piece of equipment, that means you can be more productive than using an alternative. 
• If you know that an asset is worth more to you in a new business than it is to other buyers, you can typically get it at a cheaper price through bidding. 
• If you have an existing property and want to use it as leverage to buy company property which is being liquidated. 

How finance can help

Taking out a loan when your business is being liquidated may feel like a misstep, but it can be an advantageous move when you know the value of assets is worth the credit. Working with an expert to broker the deal for you helps mitigate risk and the team here at Rangewell are ready to assist you.

We’ll walk you through the lender’s market, assess yur current position and make recommendations on how best to raise the finance. For some individuals, personal loans against assets such as your home will secure the funds you need. For others, loans may be offered based on your new business or even on the value of the asset you want to buy. 

Which type of loan you apply for will depend on your circumstances and business direction. Property finance can also help those who have a personal property portfolio purchase liquidated properties that were owned by the business itself. 

Asset finance

Asset finance is used to help businesses purchase new assets. In the context of buying liquidated assets, it can unlock the cash you need to buy your most crucial assets back. The value of the asset itself will usually be used as security and the terms and rates you receive will be based on your new business’ goals and evidence of a strong business plan. 

Asset finance is a good option for liquidated assets, as the value of the item will be the security for the loan and therefore won’t impact you on a personal level. However, if the item is expensive it may be worth considering another form of finance if the repayments could be more manageable using personal assets as security. 

As with most forms of financ,e having an expert to advise you will help guide you to the right option. Choose Rangewell and we’ll discuss the full implications of asset financing. 

Property finance

There are many different property finance options in the market, including commercial mortgages and development finance. Any business that owns property which becomes insolvent will typically see liquidation of said property, which can then be purchased at auction. 

You can use this to your advantage if you have other property or assets you can leverage against the potential property sold by the business itself. For example, if you're a co-director and the business in liquidation owned the office it was run from, you may be able to raise finance to buy the building at auction. 

As with most property finance agreements, you'll need to offer security to win lender interest. Personal assets are common for this, but the lender may also offer the loan against the value of the bought property or future value of it if it's to be used as a business or even a rental property. The most important thing is to understand the lender's market and be able to negotiate an agreement that suits you. 

Click property finance to learn more, or call us today to discuss an insolvent business and its property portfolio and see how finance can help you re-buy that property effectively. 

Finance with bad credit

If you’ve got a CVA or CCJ against you or your business, raising finance to buy assets can be a challenge. During insolvency, you may also try to raise finance on your assets and any personal poor credit will have an impact. 

Rangewell can help you mitigate the harm bad credit history, both business and personal can do to your application. We’ll work with you to assess your current situation and determine the best route forward to unlock finance to help you purchase seized assets. 

Get help from the experts

Dealing with insolvency and liquidation is extremely stressful and challenging. Why make the process of applying for finance to rebuy crucial assets or property any more complicated than it needs to be? Our team is built to help our clients through this process and negotiate the right lending agreement to help you get back on your feet and achieve your goals. Contact us now to get startyed.