Finance to buy assets from a liquidator, receiver or administrator

When a business fails, its assets do not vanish. A receiver, liquidator or administrator sells the plant, the stock, the brand, sometimes the whole business or its building. For a buyer in the same industry, these sales can be the cheapest way to add capacity: a second production line, a fleet of trailers, a full warehouse of stock, or a site you could never have bought on the open market.

The catch is the timetable. Insolvency sales run on the appointee’s schedule, not yours. Campaigns are short, offers are often unconditional, and the terms leave little room to arrange finance after you win. This page explains how to fund those purchases against property you already own.

Who sells assets out of an insolvency, and why is it so fast?

Three kinds of appointee sell assets, each for a different reason.

• Receivers are appointed by a secured creditor. ASIC’s guide for creditors says their role is to collect and sell enough of the secured assets to repay that secured creditor, and that a receiver may keep trading a business until it can be sold as a going concern.
• Liquidators wind a company up and sell its assets for the benefit of all unsecured creditors.
• Administrators take control while creditors decide the company’s future, and may sell a business or assets during that period.

Speed comes from cost and risk. Every week of trading, storage, insurance and security costs money that would otherwise go to creditors. Receivers also carry a legal duty: under section 420A of the Corporations Act, a controller selling a company’s property must take all reasonable care to sell for not less than market value or, where there is no market value, the best price reasonably obtainable. So appointees run a visible campaign, set firm deadlines and prefer buyers who can complete without conditions.

How does funding an insolvency purchase work?

The assets you are buying rarely make good security on a short timetable, so the loan is secured on real estate you already own.

1. Register interest and read the terms. Get the information memorandum, the terms of sale and the bid deadline.
2. Enquire before you bid. Tell us the property you own, what is owing on it, the likely purchase price and the deposit required.
3. Get terms and a Letter of Offer. You know your funding ceiling before you submit an offer.
4. Submit your offer. Bid within what is funded, allowing for removal and transport.
5. Settle on acceptance. Funds are paid to the appointee’s account on the date set by the terms.
6. Collect, install and trade. Then repay from the exit you planned.

If the purchase includes real property, a private first mortgage over that property can fund the balance at settlement, with your existing property covering any deposit due earlier.

What can you buy, and what security fits?

What is for sale	Usual timetable	How it is usually funded
Plant, machinery and vehicles	Tender or auction over days or a few weeks	Caveat loan or second mortgage over property you own
Stock and inventory	Often days; buyer removes quickly	Small caveat loan, $20k–$250k possible same day
Business as a going concern	A few weeks; deposit on signing	Second mortgage over a home or premises
Commercial or industrial property	Expressions of interest, then contract	First mortgage over the purchase plus existing property for the deposit
Intellectual property, brands, customer lists	Negotiated	Property you own; the IP itself is not taken as security

A caveat or second mortgage ranks behind your existing lender, so it generally costs more than a first mortgage. A caveat loan can later be converted to a registered second mortgage if the exit needs more time.

What should you check before you bid?

Insolvency sales are almost always “as is, where is”. A short checklist protects you:

• The PPSR. The register shows whether goods are being used as security and who the obligation is owed to. The government’s guidance warns that goods with a registered security interest could be repossessed even after you have paid for them. Search the company and every serial-numbered asset, and have your solicitor confirm how the sale terms deal with releases.
• Title to the goods. Hire, lease and retention-of-title arrangements are common in failed businesses. Ask the appointee what has already been excluded.
• Removal deadlines. Many sales require collection within days. Price in cranes, transport, rigging and disconnection.
• Employee and lease issues for going-concern sales. Your solicitor should review what liabilities come with the business.
• GST treatment. A going-concern sale can be GST-free if the conditions are met; plain asset sales usually carry GST. Fund the GST if it is payable at settlement.

How does this compare with other ways to pay?

Option	Can it meet an insolvency timetable?	Main trade-off
Property-secured private loan	Yes: same day possible for $20k–$250k, 24–48 hours for larger amounts once documents are in	Your property is the security; needs a clear exit
Equipment or chattel finance	Sometimes; depends on the asset and paperwork	Financier may decline used or undocumented items
Bank overdraft or term loan	Rarely within a tender window	Credit approval often takes weeks
Unsecured online lender	Fast	Smaller amounts and frequent debits that compete with the cash you need to install the assets
Paying cash from the business	Immediately	Drains the working capital you will need afterwards

The secured vs unsecured business loans comparison explains the trade-off between speed, size and security in more detail. If you are weighing a property loan against chattel finance for machinery bought outside an insolvency, our page on funding equipment and machinery sets out when each one makes sense, and why used or specialised items often push buyers towards property security.

Who is this right for?

It usually suits:

• operators in the same industry who can put the assets to work quickly;
• buyers picking up a failed competitor’s business, premises or customer base;
• traders who can resell surplus stock or machinery to repay the loan;
• builders and manufacturers adding capacity for a contract they have already won.

It usually does not suit:

• speculative purchases with no buyer or use lined up;
• anyone without property to offer as security;
• purchases where the only exit is hoping the assets resell for more.

When is a property-secured loan the wrong move?

• The appointee will give you time. Some campaigns allow deferred settlement or a finance period. If yours does and your bank can approve within it, use the bank.
• The asset is cheap enough to pay from cash flow. Borrowing against property for a small, quickly repaid purchase may cost more than it saves.
• You cannot get the assets running. If the machinery needs months of repairs before it earns, the loan term may not cover the delay. Plan for that before bidding.
• The deal depends on a resale you have not tested. If repaying relies on flipping half the assets, get indicative prices from buyers first.

What it costs (without the guesswork)

Every loan is priced on its own security, LVR, term and exit, and we aim for the sharpest price your circumstances support. Expect these parts:

• interest for the period you use the funds, which can be prepaid, capitalised or paid monthly;
• a small assessment fee that varies by loan and appears on the Letter of Offer;
• legal and registration costs for the caveat or mortgage;
• discharge costs at repayment.

With no formal valuation required, there is no third-party report to pay for or wait on. The total cost of a short-term loan guide walks through how these add up.

Illustrative example: buying a failed competitor’s plant

Illustrative: a Melbourne sheet-metal fabricator learns a competitor has gone into receivership. The receiver is selling two press brakes, a laser cutter and stock by tender, with offers due in nine days and the balance payable within five business days of acceptance. The fabricator’s factory is worth about $2.2m with $1.1m owing to the bank. At an illustrative 70% LVR band, total secured debt could reach $1.54m, leaving room of about $440k behind the bank. The owner needs $360k for the tender plus removal.

Item	Amount
Caveat loan over the factory	$400,000
Less illustrative allowance for 6 months’ capitalised interest	$(22,000)
Less assessment fee, legal and registration costs	$(10,000)
Net funds available	$368,000
Tender price for plant and stock	$(335,000)
Removal, rigging and recommissioning	$(25,000)
Left as a buffer	$8,000

The exit is the sale of the surplus press brake through a dealer plus six months of cash flow from extra orders. If the exit needs more time, the caveat can be converted to a registered second mortgage.

All figures are round and for illustration only.

Documents you’ll need

• Photo ID for every borrower, director and security owner
• The information memorandum, terms of sale and bid deadline
• Your offer letter or the appointee’s acceptance
• Title details for the security property and statements for every loan secured on it
• PPSR search results for the assets being bought
• Company or trust details for the buyer
• Evidence of the exit: resale quotes, customer orders, or recent business accounts

How fast can it settle?

Funding is possible within 24–48 hours once documents are in, and smaller property-secured amounts of $20k–$250k are possible the same day. For tender deadlines, the useful rule is to enquire as soon as you register interest, not when the bid is due.

If the purchase is a whole business, our page on buying a business with property security covers the contract side. If the funds are for a contract you have just won and need capacity for, see funding a big contract. Victorian buyers can read about private lending in Melbourne.

Ready to bid? Send us the sale details and your property and a specialist will confirm what can be funded before the deadline.

Bidding on an insolvency sale? See if you qualify

There is no credit check to make an enquiry, and your details are not shopped around to a list of lenders. A specialist who understands tender deadlines reads every enquiry. Our lending partner fundU lends directly and assesses the property itself.

Answer carefully: the property’s likely worth, every loan secured on it, the tender deadline and what you plan to buy. Accurate details let us give you a dependable answer straight away. Start your enquiry now.