Bailing a business – Is an Asset Auction the Answer?

During the lifetime of a business, financial difficulties may arise which may require a business to offload company assets to raise much-needed cash. This route is often the fastest, and most accessible, with the potential to release substantial funds into the business due to the high value of company assets, such as property, vehicles, equipment, machinery and intellectual property.

Jonathan Munnery, a business rescue expert at UK Liquidators, explores why the asset auction route may prove highly beneficial for company directors in search of ways to realise company assets fast and efficiently.

Raising cash for a financially distressed business

A company in need of urgent cash to boost cash flow, plug a funding gap, increase company reserves, settle company liabilities, or fund the purchase of another asset, may turn to the asset auction route. Where speed of sale and value for money is a priority, an asset sale can provide a solution to ailing businesses in search of ways to raise immediate cash.

Asset auctions are traditionally hosted in-person, and online to maximise reach and attract more potential buyers. Partnering with a professional asset auction house can unlock access to thousands of registered buyers, unparalleled expertise and unique industry insights.

What are the benefits of selling assets at auction?

Selling assets at auction to raise emergency cash can help financially distressed businesses release cash in record time, and keep the threat of creditor pressure and company insolvency at bay.

There are a host of benefits to selling company assets at an auction which include:

Speed of sale – The auction process is designed for speed and can, therefore, result in the sale of company assets within minutes. Assets are usually advertised in the run-up to an auction and the actual bidding process is exceptionally fast.

The asset auction route is often faster than selling company assets privately as potential buyers are pre-vetted and the legals ready to go to minimise disruption and help execute a seamless sale. Online asset auctions can target prospective buyers on a national and international scale, which can often mean more competition and a faster sale due to the sheer number of potential buyers.

Immediacy of sale – Once the hammer falls, the sale is legally bound and the winning bidder is obliged to pay the remaining amount within a dedicated timeframe, typically 28 days, however, this can vary.

Targeted reach – Asset auctions are highly targeted, and potential buyers can be refined based on specific criteria, such as sector experience and location. Assets are widely advertised with in-depth supporting descriptions and photographs to help potential buyers make informed buying decisions.

Verified buyers – Asset auctions hosted by professional auction houses have vigorous due diligence processes in place to verify buyers. This means all bidders are thoroughly vetted and proof of funds requested, to help achieve faster and secure sales.

Streamlined process – Professional auctioneers offer an end-to-end service which includes asset profiles, professional photography, ongoing marketing and asset auction services. The process is fully managed to ensure that it is streamlined and executed without disruption.

Businesses in search of ways to convert company assets to cash may consider asset auctions to achieve this. It’s important to use a trusted asset auction provider to ensure that the process is handled in a timely, efficient and secure manner as the future of your business hangs in the balance.

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