Liquidating Surplus Assets

Liquidating Surplus Assets: Unlocking Hidden Value in Your Business

It can be a tough time having your business go into liquidation but just because you are going through a difficult period, that doesn’t mean that you shouldn’t use your time to better see the potential that is in front of you as well. One of these hidden pieces of potential can be found in the sale of surplus assets. If you are going through the process of liquidation then you should be sure to consider liquidating surplus assets as you might make a bit of extra money

What Are Surplus Assets?

When a company goes into liquidation, it needs to sell its assets as a means to pay back any creditors that it currently owes money to. Once the liabilities of the company have been settled, it may be the case that there are some remaining assets left over. A lot of the time, this will be the likes of stock as opposed to shares, but whatever it is, they are something that your business could make some money on.

When you go into liquidation you will need to appoint some experts to help you throughout the process. You should ask them if they believe you will have any surplus assets and if so, what they think the best way of dealing with them might be.

What Is Liquidation?

Liquidation in terms of business is where you bring a business to an end and distribute the assets of a business to creditors who are owed money. This is an event that generally speaking tends to occur whenever a company becomes insolvent and as such they are not in a position to pay the obligations that it owes.

There are other uses for liquidation, for instance, it can be used to refer to the selling of goods which aren’t performing very well. Alternatively, it can be used to simply close down a business, regardless of whether it is insolvent or not.

How Are Assets Distributed During Liquidation?

When liquidation occurs, the assets of a business are distributed in order to generate income and use that income to pay off creditors as much as possible. The assets of the business are distributed in a specific way which is based on the priorities of the creditors. A professional will be appointed to oversee the process. The type of liquidation will influence whether the business or the court is responsible for choosing who is responsible for overseeing the process. It is good for the business to choose a professional as it means they have someone working with both their interests and the interests of the creditor in mind.

Some of the most senior claims belong to secured creditors who specifically have collateral which is on loans to the business. It’s these lenders who take the assets and sell them, usually for a discount, because there are short time frames involved and people act in the interests of paying off the creditors. If the debt isn’t fully covered then the creditors will need to try and claim back the remaining debt from the liquid assets of the organisation. If the debt is covered then any leftover assets are surplus and can be sold on for a profit so that the business isn’t at a total loss at the end of the process.

Other people who are owed money and who are taken into consideration throughout the liquidation process are unsecured creditors and shareholders. Unsecured creditors are next in line and these include the likes of bondholders, employees and the government. After that, it’s shareholders who can recoup any money that they might have invested in the organisation.

The Meaning of Liquidating a Company

Liquidating a company essentially means converting assets into cash. For instance, a business will likely sell its office (if they own it), company cars, stocks and shares in order to generate money and then pay off its creditors. Many of these assets are assessed based on how liquid they are, for instance, a home isn’t that liquid because it can take a long time to sell a home, there are a number of steps that are involved such as valuing the property, an offer being made, negotiations etc. Contrast that with stocks which are very liquid as they can be sold for cash incredibly quickly.

Looking for a Liquidation Company

If your organisation has fallen on difficult times and as such is in need of liquidators to wind things up, it is important that you appoint the right experts because these will be able to work with the interests of your business and your creditors in mind. Not only that though, they are going to be able to consider the assets that you have and let you know if you have any surplus assets.

Surplus assets can really provide you with some hidden gems throughout the liquidation process and as such, you must consider them. You should work with experts who will communicate well with you in order to talk you through the process as then you will be able to ask about such assets and find out whether or not they are realistically going to be sold.

Do You Need Help with Your Liquidation?

As can be seen above, it’s important that you choose the right liquidation company to work with in order to get the most out of the process. It can be difficult finding an organisation that you would like to work with because there are so many different options out there. That being said, if you truly do need assistance and want to find an organisation you can trust, who are efficient and who will keep in contact with you, you should speak to us at Simple Liquidation. Our team of experts will sit down with you and your business in order to find out how you operate, the industry you operate within and what your current situation is. Using that information we will be able to confirm the most efficient way forward for you. If you have any questions or require any further information then do not hesitate to get in touch.