What it Means to Liquidate Assets
When might your business need to liquefy assets, and what is the best process for doing so? Get the answers you need from The Turning Group.
Interested in Liquidating Assets?
As a business owner, it’s important to have a strategy in case you need to close your business. Maybe your company can’t pay its financial obligations, or maybe you’re ready to retire and don’t want to pass on your business. For small business owners, that is probably the easiest way to exit their business. No matter the reason, liquidating assets may be your best option for maximizing your return and smoothly closing your business. At The Turning Group, we’re here to help with every step of this process.
Liquidating Assets Definition
When a company liquidates its assets, it undergoes a rapid process of selling anything of worth, including equipment, fixtures, and real estate, to pay financial institutions when closing or reorganizing. The money that comes from turning assets into a “liquid” form (i.e., turning it into cash), is usually paid to creditors to satisfy the business’s financial obligations.
When is Asset Liquidation Necessary?
The primary reason a business would choose to liquidate their assets is insolvency, which occurs when a business reaches a point where it is unable to make necessary payments when they are due. Insolvency tends to come right before bankruptcy, but there are exceptions to this trend.
Other Reasons for Liquidation of Assets
When you work with The Turning Group, our specialists may be able to help you liquidate your assets as an alternative exit strategy without the need for bankruptcy. Additionally, some business owners who are not facing insolvency may choose to liquefy assets if they are not turning a profit and do not see any value in continuing to run their business. If this is the case, we can help you with that, too.
We Can Help You With Liquidation Of Assets
While liquidation should, in theory, be a straightforward process, the problem is that most insolvent business owners don’t have a lot of time to sell their assets or the resources to facilitate quick selling. This leads to deep discount rates or an inability to sell everything in time, significantly reducing the amount of money that can be recovered.
At The Turning Group, we support your asset sale with substantial resources, innovation, and strategies. We will develop a personalized plan to fulfill your particular needs and make sure that you obtain maximum returns by utilizing tested, cost-effective approaches to develop increased competition for your assets. We use our network of legal experts, auction, and assets appraisers to help you list your business and property as well as maximize your real estate and equipment value.
Get In Touch With Our Florida Liquidation Experts
As we explained above, liquidating your assets is essentially turning your business’ assets into cash. But what exactly does this entail when working with The Turning Group?
When you decide to go through the process of liquidating assets with our business liquidation experts, we will work closely with you to handle every detail of the liquidation process and the closing of the business. This process generally begins with creating a detailed inventory of the assets paired with an appraisal for each item. After this, we will work with our trusted professional network to begin the liquidation process, which might include a public business liquidation auction, a published sale listing, or a sale on an open financial market.
What Does it Mean to Liquify Your Assets?
Whether you have decided to close your business or you are facing insolvency, the first step in asset liquidation is to identify and make a list of all of the remaining business property you can sell. However, you also have to make a list of money owed to the business and accounts receivable – money you expect to collect.
Your list should include:
- Office furniture
- Business equipment, such as computers, telephones, etc.
- Real estate
- Vehicles that belong to the company
- Insurance premiums that can get refunded
- Security deposits
When it comes to tangible property, you should describe the condition of each item and whose money was used to purchase it.
You can also sell intangible property such as your list of customers, patents, copyrights, contracts with suppliers or customers, licenses, and other intangible assets that add value to your business. In addition, you can try to request refunds on insurance premiums, if the terms of your policies allow it. For instance, you would probably get a workers’ compensation refund because these premiums are paid in advance based on payroll estimates.
It is also important to properly document how you sold your property and how much money you’ve received, in case creditors questions your asset liquidation process.
What Does it Mean to Liquidate BUSINESS Assets?
The next step in this process is to find buyers for your property. You can do that by contacting suppliers or your competitors, as well as by listing your equipment on websites that handle auctions for your industry. Some buyers may also be interested in purchasing your businesses’ intellectual property, product names, or any jobs in progress. However, don’t expect to get more than 80% of your business asset value.
You have a legal responsibility to your creditors to get fair market value, so do whatever you can to achieve that. If you are selling your company’s property at below market value, you are committing fraud.
Don’t forget you can’t sell loan collateral before the loan is paid off. The same goes for the leased property. You can try to assign the lease to someone else or return the leased property.
In some cases, when the whole process is finished, you’re done selling your business assets and paying off your creditors, you may end up having some money left. That cash can be distributed to the owners depending on the structure of the company.
Learn More About Our Liquidated Assets Services Today
Deciding to close or liquidate your business is not an easy decision. But, we can make your asset liquidation process easier. At The Turning Group, no market is too niche, no business is too small, and no asset is too specialized. When you choose our Florida business liquidation specialists, we will take the time to work one-on-one with you to come up with a customized exit strategy based on your goals and financial situation. Contact us today to get started.
If your business is facing bankruptcy proceedings, The Turning Group can help you find a solution to keep you on your feet. Based in Doral, Florida in the Greater Miami Area, we offer comprehensive bankruptcy alternative and liquidation services to clients throughout the state of Florida. Contact us today at 305-640-5754 or fill out the form below so we can begin to steer you toward success.