Buying From a Receiver or Liquidator: What You Get and How to Fund It
Business Owners
Insolvency sales · Security searches · Settlement funding
Buying out of an insolvency is not just a cheaper version of an ordinary purchase. The buyer has to solve what is actually being sold, title and security interests, funding, tax, settlement, collection and the documents needed to use or refinance the asset afterwards. This guide follows that full journey for a third party buyer, not a director buying back their own company's assets.
Quick Answer
Buying from a receiver or liquidator in Australia is usually an as-is, where-is purchase on the seller's timetable. Before you bid or sign, confirm exactly what is being sold, run the right PPSR and title searches, settle the releases you need, calculate the full cash-to-complete and make sure your funding can settle by the contract date.
Also called: liquidation auction, receiver sale, buying a business out of administration, insolvency asset sale.
Where are you up to?
- You are still looking for a receiver or liquidator sale. Start with where these opportunities appear and how to verify the appointment. A listing tells you there is something for sale; it does not by itself prove the seller can transfer every asset shown.
- You have found an asset or business but have not offered yet. Start with what you actually get, then the title and PPSR checks. The price is not useful until you know what the lot really contains.
- You are about to bid or make an offer. Read whether the sale can be subject to finance, how to line the funding up before you commit and what sits on top of the bid price.
- Your bid or offer has been accepted and the funding is not ready. Go straight to what happens when the money is late. The pre-bid advice has already passed you by and the contract now controls the next move.
- You are buying a trading business, not just plant. Read what happens to employees, the lease, licences, contracts, IP, customer data, debtors and operating accounts before you size the working capital and settlement requirement.
- You have already paid. Go to the documents to collect before the asset is registered, insured, moved or refinanced. Those documents become harder to obtain once the appointment is finished.
- You are the former director buying your own company's assets back. That is a different transaction. Read why this guide does not cover it before you treat the third-party buyer rules as yours.
Who is actually selling, and does the role change what you are buying?
The seller can be a receiver, voluntary administrator, liquidator or mortgagee exercising a power of sale, and that role determines what power is being used, which assets can be sold and which duties apply. Do not treat those labels as interchangeable, because the buyer's title and the seller's authority start with the appointment.
A receiver, or a receiver and manager, is appointed by a secured creditor and sells that creditor's collateral. The Australian Securities and Investments Commission puts it plainly in its creditor guide: the secured creditor can appoint a receiver because it holds a security interest that allows it to, the receiver's job is to collect and sell enough of the secured assets to repay the debt owed to that creditor, and the receiver's principal duty is to the secured creditor. Where the terms of appointment also give the power to run the company's affairs, the appointee is a receiver and manager.
A voluntary administrator controls the company and may sell the business rather than break it up, because a trading business is usually worth more whole. That is also the process in which a deed of company arrangement can be proposed, and a deed has to be executed inside the period the Corporations Act 2001 allows after creditors resolve on it, unless the Court extends that period. A buyer negotiating with an administrator is negotiating inside that clock.
A liquidator winds the company up and realises assets for creditors generally, not for one secured creditor. The Australian Securities and Investments Commission describes liquidation as allowing an independent registered liquidator to take control of the company so its affairs can be wound up in an orderly and fair way to benefit creditors, and the liquidator's tasks as protecting, collecting and selling the company's assets and distributing what is left after costs. See the liquidation glossary entry for the short version.
A mortgagee exercising a power of sale is not an insolvency appointee at all. It is a lender selling land under its own mortgage, and the rules that govern it are state property statutes rather than the Corporations Act 2001. That distinction decides which duty applies to the price, which is the next section.
One technical point matters more than it looks. A receiver or receiver and manager is a controller of the company's property, and while a controller is in place section 116(1) of the Personal Property Securities Act 2009 switches off the enforcement chapter of that Act, so Part 5.2 of the Corporations Act 2001 governs the enforcement instead. In practice that means the process notices and the enforcement conduct you might expect from a secured party enforcing under the securities legislation are not the ones you will see.
| Who is selling | What power they are exercising | What that means for the buyer |
|---|---|---|
| Receiver, or receiver and manager | A power under the security held by the appointing secured creditor, over that creditor's collateral | The duty on price in section 420A of the Corporations Act 2001 applies. The receiver can only sell what the security reaches, so the asset list can be narrower than the business you are looking at |
| Voluntary administrator | Control of the company while creditors decide its future, including a sale of the business to preserve value | You are negotiating inside a statutory timetable. A sale may be conditional on the creditors' decision or on a deed of company arrangement being executed |
| Liquidator | Realisation of assets for creditors generally, under the winding up provisions | A liquidator is not a controller, so the section 420A duty does not reach the sale. Expect the widest asset pool and the least warranty |
| Mortgagee exercising a power of sale | The power of sale in its own mortgage over land, governed by state property statutes | The duty on price comes from the state statute, not the Corporations Act 2001, and it differs by jurisdiction |
| Nobody, because the company has already been deregistered | Not a sale by an appointee at all. Property left behind by a deregistered company vests in the Australian Securities and Investments Commission | There is no liquidator to deal with and no contract to negotiate. Acquiring the asset runs through the Commission's own process, or through reinstating the company, both on their own timetables and both questions for your solicitor before you spend anything |
| Director of the failed company buying back | Not a power at all. An ordinary purchase, by a party connected to the seller | Out of scope for this guide. Different risks apply, including creditor defeating dispositions and the illegal phoenix regime |
| Terms you may have read online | Petition, pre-pack, administration order, official receiver, foreclosure, chapter 11 | These are British or American terms and none of them describes an Australian corporate insolvency. Australia uses winding up application, voluntary administration, deed of company arrangement, receiver and manager, controller and power of sale |
Buying back the assets of your own failed company is a different transaction
This guide is written for a third party buyer, and that needs saying in the first screen because the search results for this topic are dominated by something else: the director of the failed company buying the assets back. That is a different transaction with different risk, and it sits near creditor defeating dispositions and the illegal phoenix regime. We do not advise on it and this page does not cover it. If that is your situation, the first call is to your own solicitor and an understanding of what the appointment means, not to a funder. If you have received a demand or a statutory demand as a director, or a personal guarantee has been called, deal with those before you think about buying anything back.
What does the seller actually warrant, and what do you not get?
A receiver or liquidator usually gives the buyer very few warranties, and many insolvency sales are expressly made as is, where is. That means the buyer should assume that condition, completeness, title, quantity and description need to be verified independently unless the contract clearly says otherwise. The absence of ordinary seller assurances is part of the transaction, not a defect you discover after signing.
The practical consequence is that every piece of work a vendor's warranty would normally do falls to you, and it falls to you inside a due diligence window the appointee sets rather than one you negotiate. An appointee does not know the company's history, has not run the business, and has no incentive to warrant anything about it. Where a solvent vendor answers requisitions, an appointee will often decline to answer them at all.
There is also no official guide written for you, and that is worth knowing before you start looking for one. The Australian Securities and Investments Commission publishes a series of plain English insolvency guides and names the audience on each of them: a guide for creditors on receivership, a guide for creditors on voluntary administration, a guide for creditors on liquidation, guidance for directors, guidance for employees, and guidance for investors and shareholders. There is no guide for the buyer. Every other party to an insolvency has an official explanation of what the process means for them, and the person putting the money in does not, which is why the searches, the releases and the timetable described below have to be run by you rather than looked up.
Sales run in several shapes and the shape changes how much time you get, how much you can negotiate, and whether a condition is available at all.
| Sale shape | How it runs | What it gives the buyer |
|---|---|---|
| Public auction | Assets are catalogued in lots and sold to the highest bidder on the day, on published terms that are not negotiated | The least room of any shape. Bidding is unconditional, the deposit is due immediately and the settlement window is short. Everything has to be done before you register |
| Expressions of interest | Written offers are submitted by a deadline and the appointee assesses them together | Some room to shape what is in the lot and to ask questions, but the appointee is comparing your offer against others on certainty as well as price |
| Private treaty | The appointee negotiates directly with one or a small number of identified buyers | The most negotiating room, usually where the asset is specialised or the buyer pool is small. Still on the appointee's contract and still on their timetable |
| Going concern sale of a trading business | The business is sold as an operating entity, often while it continues to trade under the appointee | More time than any asset shape, because the business has to keep running while the sale completes, and more chance that a condition will be entertained |
| Online insolvency platform | Lots are listed on a specialist platform with standard terms and a fixed close | Fast, wide open to other bidders, and short on settlement time. Registration usually closes before bidding does |
Where do you find receiver or liquidator sales, and how do you verify who is selling?
Australian receiver and liquidator sales can appear through insolvency practitioners, specialist auctioneers, business brokers, commercial property agents, expressions-of-interest campaigns and direct approaches to industry buyers. ASIC's Published Notices website is useful for confirming that an insolvency notice has been published, but a notice or auction listing is not the same thing as proof that the seller has authority over every asset in the catalogue.
Use ASIC to verify the person and the appointment, then verify the asset separately. ASIC says registered liquidators appear on its Register of Liquidators, and its insolvency-notices service lets users search notices published from 1 July 2012. For a receiver, ASIC also explains that the receiver's powers come from the security agreement, the appointment documentation and the Corporations Act 2001. That means a buyer should confirm the practitioner, the appointment and the scope of the property being sold rather than treating the words receiver sale or liquidation auction as an ownership certificate.
| Source | What it is useful for | What it does not prove by itself |
|---|---|---|
| ASIC insolvency notices | Checking whether a relevant corporate insolvency notice has been published and identifying the appointment type and practitioner named in the notice | That the practitioner has power over every asset shown in a later sale listing, or that the asset is free of third-party claims |
| ASIC Register of Liquidators and Professional Registers | Checking that the practitioner is a registered liquidator and whether the professional register shows relevant conditions | That a particular appointment is current or that a particular item falls within a receiver's secured property |
| Insolvency practitioner's sale page or sale agent | Finding live sale campaigns, expressions of interest, data-room access and contact details for the transaction | Clean title, condition, completeness or a release of registered security interests |
| Auction platform, business broker or commercial agent | Finding the lot, business or property and reading the published bidding, deposit, payment and collection terms | That a catalogue description matches the physical asset or that every item visible on site belongs to the seller |
Before you pay a deposit, ask for enough evidence to connect the listing to the seller's actual power. For a receiver purchase that usually means the appointment details and a clear statement of the assets or collateral being sold; for any personal-property purchase it also means the asset schedule, identifiers, PPSR searches and the release path. Your solicitor should confirm the seller's authority where the appointment, asset ownership or sale scope is unclear. ASIC's receivership guide explains that a receiver takes control of some or all company assets and that the powers depend on the security and appointment.
Searches carry their own limits. The National Personal Insolvency Index concerns personal insolvency and does not replace company searches, ASIC corporate insolvency notices, PPSR searches or land-title searches. Use the register that answers the particular question you are asking rather than one search as a universal insolvency check.
What you usually do get
- Whatever interest the company actually had in the asset, which may be less than it appears
- An asset list or schedule, sometimes with serial numbers
- Access to inspect, in a window the appointee sets
- A contract on the appointee's terms, usually with a fixed completion date
- A release from the appointing secured creditor where one is required and can be arranged
What you usually do not get
- A warranty of title, quantity, condition or description
- Answers to requisitions, or a vendor who knows the trading history
- Any assurance that third party owned assets have been separated out
- A finance condition, or in most cases any condition at all
- Time. The window is set by the appointee's obligations, not by your lender
If you are weighing this against a purchase from a solvent vendor, the structural comparison is set out in our guide to share sale against asset sale funding, and the trading business version of the question is covered in what a going concern sale actually includes.
Does a receiver or liquidator owe a duty on the sale price, and can the sale be unwound?
A receiver can be subject to a statutory duty about the sale price, but that duty is not a warranty given to the buyer. Section 420A of the Corporations Act 2001 applies to a controller exercising a power of sale, which includes a receiver in that capacity, and requires reasonable care to sell for not less than market value where there is a market value or otherwise for the best price reasonably obtainable in the circumstances. A liquidator acting as liquidator is not a controller under that section, although different duties can still apply to the liquidator and to mortgagees selling land under state law. A breach of the seller-side duty does not automatically unwind a completed purchase, so a buyer still has to concentrate on title, security releases and the contract they are signing.
The receiver limb is the one that is well covered. The Australian Securities and Investments Commission describes the same obligation in its receivership guide for creditors as a duty owed to unsecured creditors to take reasonable care to sell secured assets for not less than market value or, if there is no market value, the best price reasonably obtainable.
Now the part the buyer needs separated properly. Section 420A does not apply to a liquidator merely because the company is in liquidation, because a liquidator acting in that capacity is not a controller for that provision. That does not mean a liquidator has no duties when realising assets. It means the receiver-specific market-value rule is the wrong rule to quote for a liquidator. A mortgagee selling land is different again and is governed by the property law of the state where the land sits.
Not every jurisdiction has legislated the same thing. Western Australia has no provision equivalent to the three above imposing a statutory market value duty on a mortgagee exercising a power of sale, so the position for land there rests on the general law and on the terms of the mortgage itself. If your purchase is in Western Australia, that is a question for your own solicitor before you commit rather than an assumption to carry over from the eastern states.
Here is the sentence a buyer actually needs, and it is on the face of each of those statutes. A breach of the duty gives the person who suffers loss a remedy in damages against the mortgagee or the appointee. It does not impeach the purchaser's title. New South Wales says the title of the purchaser cannot be challenged on the ground that the duty was breached. Queensland says the title of the purchaser is not impeachable on that ground. Victoria says the title of the purchaser shall not be impeachable on the ground that the power was improperly or irregularly exercised, and that a person damnified has a remedy in damages against the person exercising the power. So a buyer worrying that a cheap purchase might be clawed back later is worrying about the wrong risk. The risks that actually reach you are the ones in the security register and the things that travel with the business.
This section is about commercial and business property, not buying a home from a bank
Search this topic and most of what comes back is written for a person buying a house from a lender in possession, by real estate agencies and conveyancers. That material is not wrong, but it does not carry across. Consumer protections, cooling off regimes and the disclosure obligations that shape a residential sale are built for residential land and for individuals, and a commercial or business purchase sits outside most of them. Where the property is a going concern or the security is specialised, the valuation basis moves too, which is what forced sale value describes and why first mortgagee consent becomes a live issue if you plan to fund behind an existing lender. The same transaction seen from the borrower's side is covered in our guide to refinancing when a mortgagee is in possession.
Do you take plant and equipment free of PPSR security interests?
A buyer does not automatically take plant and equipment free of PPSR security interests. A clear search can give important protection in the right circumstances, but a registration is not a simple ownership register and an insolvency sale can involve perfected interests, unperfected interests, retention-of-title claims, leases and assets the company never owned outright. Treat the search result, the asset schedule and the written releases as parts of one title check rather than substitutes for each other.
Start with what the register itself says. The Personal Property Securities Register's buyer guidance states that you will generally take property free of a security interest if someone has not registered their security interest on the register, unless they have perfected it another way, or if you buy from a seller that usually sells that kind of property as part of its ordinary course of business. It then names the exceptions: where the buyer was part of the transaction that created the security interest, bought the goods as inventory, or knew about the security interest.
Do not assume the ordinary-course buyer rule solves an insolvency sale. Section 46 of the Personal Property Securities Act 2009 is framed around property sold in the ordinary course of the seller's business of selling property of that kind, and the statutory exceptions are specific. Whether that rule applies to a particular insolvency transaction is a legal question about the actual seller, security interest and sale. For a distressed asset purchase, the safer operational approach is to identify the asset precisely, run the searches that fit that asset, identify registered secured parties and obtain the releases the contract requires rather than betting completion on a broad buyer-protection assumption.
A clear PPSR search is not the same thing as proof of ownership. The PPSR is a notice register for security interests, not a register of every proprietary claim. The PPSR's own glossary also warns that a serial-number search may not reveal every commercial security interest because some registrations can be made only against the grantor. A clear result can still leave questions about the wrong serial number, a grantor-only registration, third-party ownership, a lease or retention-of-title arrangement, an interest perfected another way, or whether the statutory buyer-protection conditions are actually met. Keep the dated search result, but pair it with the asset schedule, physical identifiers and written releases.
The protection that does work is the serial number search. The register's guidance is that for serial numbered property you will generally take the property free of claimed security interests where you search against the correct serial number, on the actual day or the day before the sale goes through, and the search shows no security interest registered against that serial number. For serial numbered property other than motor vehicles the search has to be done immediately before you buy. The named exceptions still apply, including where the seller is listed as the secured party, where you bought as inventory, and where you knew about the interest. Two operational points follow from that. The search has to be against the correct serial number, not the description, and it has to be dated to the transaction rather than to the week you started looking.
Do not reach for the consumer protection. The personal, domestic or household protection has both a price ceiling and a use test: the register's guidance describes the item as priced at five thousand dollars or less and for personal, domestic or household use, and it does not apply where the item can or should be registered by serial number, where you know there is a security interest, or where you knew or should have known the market value was above the ceiling. Business plant does not qualify on the use test regardless of price.
Land is a different register entirely. Land is outside the definition of personal property in section 10 of the Personal Property Securities Act 2009, and fixtures are carved out of it too. A purchase that includes premises therefore touches two registers with two sets of searches, and something bolted down may be a fixture dealt with by the land title rather than an item of plant dealt with by the security register. Where an asset sits on that line, the classification changes both who can sell it to you and what has to be released.
Vesting is the other half of the picture, and it cuts both ways. Section 588FL of the Corporations Act 2001 vests certain security interests in the company where the collateral was not registered within the times that section sets, on the occurrence of a winding up, an administration, a deed of company arrangement or a restructuring. Section 267 of the Personal Property Securities Act 2009 does something similar for security interests that are unperfected at the critical time, vesting them in the grantor immediately before the event. Both sections then carry a protection for a buyer who acquires personal property for new value from a secured party, from a person on behalf of a secured party, or from a receiver exercising powers under the security agreement, provided the buyer had no actual or constructive knowledge of the winding up application, the resolution, the administrator's appointment or the deed. Note where that leaves you: section 588FL puts the onus of proving the absence of knowledge on the person asserting it, and a buyer at an advertised insolvency sale is unlikely to be able to assert it at all. Treat the vesting provisions as something that changes what the appointee has to sell, not as a protection you can lean on.
Retention-of-title stock and leased or hired plant need more care than the label suggests. Those arrangements can create security interests under the PPSA, and the result on insolvency can depend on the agreement, whether the interest was perfected and whether a vesting rule applies. The PPSR itself warns lessors and owners that failing to register a registrable interest can leave the goods exposed if the customer becomes insolvent. So do not assume that an item is untouchable because a supplier or lessor says it owns it, and do not assume the appointee can sell it because it is standing on the floor. Ask for the third-party asset schedule, search the relevant registrations and have your solicitor confirm what interest the seller can actually transfer. See the PPSR guidance on leases, bailments and consignments and retention of title and PPSR protection.
It is worth saying plainly why this is hard to research. The register is built, written and explained for the party registering an interest. Nearly everything published about it answers a supplier's question, which is how to register so you can recover your gear when a customer fails. So if you have landed here because a customer of yours has gone under and you want your equipment back, this page answers the opposite question. You are the party with the security interest, not the buyer taking free of it, and the register's own guidance for secured parties is where that question is answered. The buyer's protections are on a different page and they work differently. The PPSR glossary entry is the short version, and the practical checks on machinery and plant bought this way are in buying machinery at a bankruptcy or insolvency sale and in the red flags set out for private sales, auctions and imported plant.
| Asset type | Where the protection comes from | What the buyer must actually do |
|---|---|---|
| Serial numbered goods, including vehicles and watercraft | A clear search against the correct serial number, on the day of or the day before the sale for motor vehicles, and immediately before the sale for other serial numbered property | Search the serial number itself, dated to the transaction, and keep the result. Check whether the seller is listed as the secured party, which is a named exception |
| Other plant and equipment without a serial number | Unregistered interests, and otherwise a written release from each registered secured party | Search against the company, identify every registered interest over the asset class, and obtain releases before settlement rather than after |
| Stock supplied on retention of title terms | The result depends on the security agreement, PPSR perfection, priority and any insolvency vesting rule. A retention-of-title clause is not the end of the analysis | Identify the supplier claim, check the registration and have your solicitor confirm whether the interest survived the insolvency and what the appointee can transfer |
| Plant held on lease or hire | Ownership may sit with the lessor, but some lease and hire arrangements create PPSA security interests and the insolvency result can depend on perfection and the terms of the arrangement | Identify the lessor, check the PPSR and the lease, and settle whether you are buying the asset, taking an assignment or entering a new hire agreement |
| Land and anything that has become a fixture | The land title system. Land is outside the definition of personal property and fixtures are carved out | Run title and land searches as well as security register searches, and settle the fixture question in the contract where an item could be either |
| Goods you are buying as inventory to resell | Less than you think. Buying as inventory is a named exception to the take free rules | Do not rely on the ordinary course or serial number protections for resale stock. Obtain releases and take advice on the classification |
Can you buy from a receiver or liquidator subject to finance?
An insolvency sale is usually not conditional on finance, especially where the sale is by auction or the appointee is comparing offers on certainty as well as price. A finance condition can sometimes be negotiated on a private treaty or going-concern sale, but you should assume the seller can refuse it and have your solicitor read the exact condition before you rely on it.
Auction is the clearest case. Once the hammer falls, the buyer is normally bound on the published auction terms. A residential cooling-off rule from another transaction does not turn an insolvency plant or business auction into a conditional purchase. Treat the sale terms as the rulebook for the transaction.
Private treaty and expressions of interest can have more room, but certainty still has a price. An administrator trying to keep a trading business alive may have more reason to consider a conditional offer than a liquidator selling plant lot by lot. Even then, a condition that lets the buyer walk away carries execution risk for the estate, so a lower unconditional offer can beat a higher conditional one.
If a finance clause is accepted, strict compliance matters. A subject-to-finance clause is a condition in a binding contract, not a general permission to change your mind. The Legal Practitioners' Liability Committee explains why buyers must follow the clause as written in its guidance on subject to finance requiring strict compliance. Your own solicitor should read the actual clause before you sign.
The deposit is committed money, not a holding fee while you arrange credit. There is no universal insolvency-sale deposit percentage. The sale terms set the amount and timing, and an unconditional buyer can put the deposit at risk by failing to complete. Read the deposit, default, extension and termination clauses before you bid, not after you win.
| Step | What you are trying to prove | What can stop the purchase |
|---|---|---|
| Read the sale terms first | Deposit, buyer charges, GST treatment, completion date, default rights and collection obligations | Discovering after the bid that the total amount or deadline is different from what you assumed |
| Get the asset list and third-party-owned-asset schedule | What the seller says is included and what is physically present but excluded or claimed by somebody else | Paying for a floor full of assets when the contract transfers only part of them |
| Inspect and match identifiers | Condition, completeness, tooling, serial numbers, VINs and compliance plates | The finance, insurance or registration documents describing a different asset from the one on site |
| Run the title and security searches | Land title where relevant, company searches and PPSR searches against the correct grantor or serial number | A secured party or third-party claim that survives the sale or delays settlement |
| Confirm the release path | Who will release each relevant registration or claim, in what form and by when | Credit is ready but the asset cannot be transferred cleanly |
| Calculate total cash-to-complete | Price plus GST where payable, buyer charges, duty where applicable, costs and immediate operating cash | An approved facility that still leaves the buyer short on settlement day |
| Set the funding limit and exit | Which facility settles the purchase and, if temporary money is used, how it will be refinanced | Bidding first and trying to make the credit structure fit afterwards |
| Register to bid or submit the offer | Identity, bidder registration and any pre-authorisation or deposit requirement | Missing the sale despite having done the commercial work |
How do you finance a purchase from a receiver or liquidator?
A purchase from a receiver or liquidator can be funded with cash, asset finance, business-acquisition finance, commercial property finance, short-term property-secured funding or a combination of those, but the workable route depends on what you are buying and whether the funder can settle by the seller's deadline. The finance application has to be built around the asset, the sale terms and the cash-to-complete rather than around the winning bid alone.
Pre-approval before you bid can reduce the credit risk, but it is not the same thing as having unconditional settlement money. A funder may be able to assess the buyer, servicing position or alternate property security before the auction, but final approval can still depend on the actual asset list, serial numbers, PPSR position and releases, valuation, sale contract or invoice, GST treatment and the seller's completion date. Ask the broker what is genuinely approved, what remains a condition, and the latest date each condition can be satisfied before you treat the facility as bid-ready.
| Funding route | Where it can fit | What has to be resolved before you rely on it |
|---|---|---|
| Cash or existing liquidity | Fast asset purchases where the buyer can complete without a credit approval | Evidence of funds, the full amount payable under the sale terms, and enough liquidity left for tax, removal, repairs and working capital |
| Asset or equipment finance | Identifiable plant, vehicles or equipment that the lender is prepared to finance | Correct serial numbers, clean title or acceptable releases, invoice or sale contract, acceptable age and condition, and a value the lender can support |
| Business-acquisition finance | A trading business where earnings, lease tenure and the operating model support debt | Financial information, purchase structure, lease and landlord consent, licences, working capital, employee plan and enough time for credit assessment |
| Commercial property finance | Freehold commercial property included in the acquisition | Valuation, title, contract, borrower servicing and enough lead time for the property-security process |
| Short-term property-secured funding | A fixed completion date that arrives before a longer-form acquisition or bank facility can be completed, where the buyer already has acceptable property security | The existing property security, payout position, legal documents, the exact completion requirement and a credible refinance or exit plan after settlement |
| Combined structure | Where one facility funds the asset or property and the buyer funds deposits, buyer charges, tax or working capital separately | A single cash-to-complete calculation so the facilities and the buyer's own funds cover the same settlement day rather than leaving an unfunded gap |
The lender's number may not equal the price you paid. A lender values its security for a lending purpose, not to congratulate the buyer on a bargain. Specialised plant may be valued on a realisation assumption, chattels can be excluded from a property valuation, and a trading business can be worth less to a lender if the lease, licence or key contracts are not secure. That valuation basis is one of the first things to settle with the broker rather than the last thing to discover before completion.
| Document or fact | Why the funder needs it | What goes wrong if it is missing |
|---|---|---|
| Auction terms or sale contract | Shows the deposit, completion date, default position, GST treatment and any buyer charges | The facility can be approved to the wrong date or the wrong total amount |
| Asset list with serial numbers | Defines what is being bought and what can be searched, valued and financed | The lender may be assessing a description rather than the actual security |
| PPSR searches and expected releases | Shows whether another party has a security interest and what must be released at settlement | Credit can be ready while settlement is blocked by title |
| Total cash-to-complete | Combines the price with GST where payable, buyer charges, duty where applicable and other settlement costs | The buyer can have an approved facility and still be short on the day |
| Business financials and working-capital requirement | Needed where the buyer is acquiring an operating business rather than one asset | The purchase can settle without enough cash to pay wages, suppliers or restart trading |
| Lease, landlord consent and licences | Shows whether the buyer can occupy the premises and lawfully keep trading after settlement | The lender can fund a business the buyer cannot yet operate |
| Property details for any alternate security | Required if the purchase is being funded against property the buyer already owns | The fast-settlement route is only theoretical until that security is actually acceptable |
| Refinance or exit plan | Shows how short-term money will be repaid after the urgent purchase has settled | The purchase gets funded but the expensive temporary structure becomes the long-term structure by accident |
From our broking, indicative
On insolvency purchases, the problem that blocks settlement is often not the final credit decision. It is usually one of the dependencies around it: the release that has not arrived, the landlord consent that has not started, the valuation instructed on the wrong basis, or a cash-to-complete calculation that stopped at the hammer price.
- Start the release and consent clocks at the same time as the funding clock.
- Give the funder the sale terms, not just the purchase price.
- Ask for the third-party-owned-asset schedule before you value what is on the floor.
- Plan the refinance or long-term structure before using short-term money.
- Keep enough liquidity for the first operating cycle after settlement, not just the settlement itself.
Indicative only, based on deals we have placed and current as at September 2026. This is not a quote, an offer or a promise of approval or timing. Actual terms depend on the asset, security, lender policy and your circumstances. General information only. Not financial advice.
What happens if your offer is accepted but the money is not ready?
Once an unconditional offer has been accepted, the contract controls what happens if the money is late. Depending on the document, that can mean default interest, an extension request, a notice to complete, termination, loss of deposit and potentially a claim for further loss. The safest move is to identify the problem before the completion date and have your solicitor deal with the seller in writing.
Separate a timing problem from a funding shortfall. If the approved money is coming but not by the contractual date, the question is whether an extension or temporary funding can bridge the timing. If the approved money is not enough because the valuation or facility basis is lower than expected, extra time alone does not close the gap.
Ask for an extension before the date, not after it. Before completion, the request is still a commercial negotiation. After default, the seller may have rights that did not exist the day before. Put the requested period, the reason and the event that will solve the problem in writing through your solicitor.
Do not import residential default rules into a business or plant purchase. Much of what is published about failed settlements is written for homes and standard residential contracts. An appointee's contract can use different deposit, notice, interest and termination machinery. Read the actual document. Our guides to what a notice to complete does, penalty interest on late settlement and a valuation shortfall at settlement explain the adjacent problems, but your solicitor applies them to the contract in front of you.
Nomination, on-sale and substitution are contract questions. Some contracts permit a substitute purchaser and others do not. Do not assume another entity can step in after the winning bid unless the document and the seller allow it.
What transfers with the business, and what does it do to your funding?
A trading business does not arrive as one self-contained object at settlement. Employees start under the new employer only if the employment arrangements are put in place, lease rights depend on the lease and any required consent, licences may need transfer or reissue, and key contracts may need counterparty support. Every item that is not ready on day one can create a cash or trading gap the buyer has to fund.
The employment position, briefly, because the Fair Work Ombudsman owns this ground. Employees do not transfer automatically; the old employer's employment ends and employees become unsecured creditors of the failed company for what they are owed. Where you do employ them, the Fair Work Ombudsman states that on a transfer of business a new employer has to recognise an employee's service with the old employer when working out most entitlements including sick and carer's leave, requests for flexible working arrangements and parental leave, while a new employer that is not an associated entity of the old employer can choose not to recognise that service for redundancy, annual leave, long service leave, unfair dismissal and notice of termination. The Fair Entitlements Guarantee, which covers eligible employees who lost their job because of their employer's insolvency, is a scheme for employees of the failed employer administered by the Australian Government. It is not an obligation of the purchaser and it is not something you assume when you buy. Read the Fair Work Ombudsman's own page on employee entitlements on a transfer of business, and the Commonwealth page on the Fair Entitlements Guarantee, and take the specifics to an employment adviser.
If you are an employee of the failed company rather than a buyer, this page is written from the other side of the table. The two pages linked immediately above are the right starting points for what you are owed and what the Commonwealth scheme covers, and nothing on this page is advice about your entitlements.
Now the part that changes the money. Fair Work's transfer-of-business rules require recognition of service for most entitlements, while a new employer that is not an associated entity can choose not to recognise prior service for some specified entitlements, including annual leave and redundancy. Where the old employer remains liable for an entitlement, insolvency can mean the employee is left claiming against the estate and, if eligible, the Fair Entitlements Guarantee rather than receiving cash at settlement. For the buyer, the practical job is to document which employees are being offered work, which service is being recognised and what liability or working-capital requirement follows from that decision. Have an employment adviser quantify it before completion.
What a lender wants to see when staff are being re-employed is the shape of that decision written down: who is being offered a job, on what terms, whether prior service is being recognised, and what the resulting accrued liability is at completion. A working capital request that arrives without that is a request the credit assessor cannot size.
Lease assignment and landlord consent are funding conditions, not legal housekeeping. Most commercial leases require the landlord's written consent to an assignment, and the landlord will usually want your financial position, and often a bank guarantee or a personal guarantee, before giving it. That process has its own timetable and it does not compress to suit an appointee's completion date. Reconcile the two before you sign, because a consent that lands after settlement is a business you have paid for and cannot occupy. Where the premises are the point, the tenure comparison sits in freehold against leasehold on a going concern and in our guide to freehold going concern against leasehold.
Licences and permits are a timing risk that can outlast the sale. Liquor, food, transport, health and environmental approvals are granted to a person or an entity, and transferring or reapplying for them takes as long as the regulator takes. A business bought without the approval it needs to trade is a business that is not trading, and the funding cost of that gap is yours.
Contracts are where the process you are in matters most. The stay on ipso facto rights protects certain contractual rights where a company comes under administration, under section 451E of the Corporations Act 2001, and where a managing controller of substantially the whole of a corporation's property is appointed, under section 434J. Both provisions stop a counterparty enforcing a right merely because of the appointment or the company's financial position. There is no equivalent provision triggered by a winding up. A stay that began in an administration can continue where that administration ends in a winding up, but a company that goes straight into liquidation never gets one. So a buyer relying on a key supply or customer contract coming across needs to know which process the seller is in, because in a straight liquidation the counterparty's termination rights are live. If the failed company's own funding was withdrawn, our guide on what happens once a winding up application is filed and the note on funding options at that point explain the seller's side of that clock.
Customer data, software accounts and digital assets need their own due diligence. The Office of the Australian Information Commissioner says the Privacy Act can regulate the handling of personal information during a business sale, and specifically notes that selling assets that include personal information in a customer database can amount to trading in personal information. Do not value a customer list as though it is a box of stock. Confirm what data can lawfully be disclosed and transferred, who controls the domain and business-name registrations, whether software licences and platform accounts can be assigned, and what new contracts or consents the buyer needs. Read the OAIC's guidance on selling a business before customer records are copied into the buyer's systems.
| Item | Position on a sale out of external administration | Funding consequence for the buyer |
|---|---|---|
| Employees | Employees are not simply an asset in the sale. A Fair Work transfer of business depends on the employee moving to the new employer and the statutory connection between the employers | Budget day one payroll and have the employment plan settled before completion rather than assuming the workforce arrives automatically |
| Prior service and employee entitlements | Most service must be recognised in a transfer of business, but a non-associated new employer can choose not to recognise service for some entitlements, including annual leave and redundancy, subject to the Fair Work rules | Quantify whichever liabilities carry across. Where the old employer remains liable but cannot pay because of insolvency, eligible employees may need to pursue the estate or the Fair Entitlements Guarantee rather than the buyer |
| The lease | Many commercial leases require the landlord's written consent to an assignment, on the landlord's timetable and subject to the lease terms | A funding condition. Consent may require financial information, a bank guarantee or a personal guarantee, which can consume cash or security at completion |
| Licences and permits | May need transfer, variation or a fresh application to the regulator, depending on the licence and buyer entity | Fund the gap between settlement and the day the buyer can lawfully trade, and do not assume the seller's approval follows the assets |
| Supplier and customer contracts | Assignment, novation or counterparty consent can be required. Insolvency-related termination rights also depend on the process and the contract | A lender may discount earnings that rely on a contract the buyer has not secured. Working capital may rise if suppliers demand cash terms |
| Business name, domain, IP and software | Transfer depends on what is owned, what is included in the contract and whether a licence or platform account is assignable | Budget transfer fees, replacement software, new accounts and any period in which the buyer cannot use the trading name, system or platform |
| Customer database and personal information | Not ordinary stock. Privacy obligations can apply to disclosure and transfer of customer information during a business sale | Do not value the database as automatically transferable. Legal/privacy work and a controlled data migration can be part of the completion plan |
| Stock and inventory | Only the stock actually included and transferable under the sale should be counted. Retention-of-title and third-party claims need separate analysis | Re-value usable stock after exclusions and fund replacement inventory if the sale delivers less trading stock than the catalogue suggests |
| Debtors and receivables | Do not assume trade debtors are included. Receivables can sit within a secured creditor's collateral or be expressly excluded from an asset sale | If receivables do not transfer, the buyer needs more working capital because there is no opening debtor book to fund early expenses |
| Customer deposits, gift cards and prepaid work | Do not assume the buyer takes the cash or the obligation. The contract must identify what, if anything, is assumed | If the buyer agrees to honour prepaid obligations without receiving equivalent cash, that is an immediate working-capital liability |
| Insurance, utilities and merchant/platform accounts | Often require the buyer to arrange new cover or new accounts from the relevant handover date rather than relying on the failed company's arrangements | Budget deposits, premiums and setup time, and make sure cover starts when risk or possession passes |
If the business rather than the assets is the target, the funding structure for the whole transaction is set out in our guide to a loan to buy a business.
What costs can sit on top of the purchase price?
The cash required to complete can be materially higher than the hammer price or contract price. Depending on the sale and the state, the buyer may also need to fund GST, a buyer's premium or auction charge, duty on dutiable property, legal and search costs, valuation and finance costs, removal or transport, lease security and the working capital needed to trade after settlement.
| Cost or cash item | When it can apply | What the buyer should confirm before bidding |
|---|---|---|
| GST on the sale | Where the supply is taxable and not GST-free | Whether the bid or price is GST inclusive or exclusive, who is registered and whether the going-concern rules are being relied on |
| Buyer's premium or auction charge | Where the auction terms add a buyer-side fee to the winning bid | The exact calculation in the sale terms and whether GST applies to the charge |
| Transfer duty | Where the state treats property in the transaction as dutiable, such as land, an interest in land or certain goods connected with dutiable property | Which assets are dutiable in that state and the value on which duty will be assessed |
| Deposit and card or payment charges | Where the auction or contract requires them | When they are payable, whether they are refundable and how they interact with the final amount due |
| PPSR, company and title searches plus releases | Where title and security interests have to be checked or discharged | Which searches are required, who supplies the releases and whether any third party charges for them |
| Valuation, legal and finance costs | Where the funder or transaction requires professional work before settlement | Who pays them if the purchase does not proceed and whether they are payable before formal approval |
| Dismantling, loading, transport and storage | Where plant, equipment or stock has to be removed from the site | The collection window, lifting requirements, site access, insurance and any late-removal or storage consequences |
| Lease security and working capital | Where a trading business needs premises, staff, stock or supplier payments immediately after settlement | The landlord's security requirement and enough liquidity to operate before revenue normalises |
Duty is not one national rule for every business purchase. In New South Wales, the state revenue office currently explains that a business acquisition can be non-dutiable where it contains no land or interest in land, while a transaction containing land, a lease or other dutiable property can bring certain goods into the duty calculation. Victoria applies land transfer duty to the dutiable value of property, generally the greater of the price and market value. Those examples are enough to show why a buyer should not apply one percentage to the whole Australian purchase. Check the state, the asset mix and the transaction structure with your solicitor and the relevant revenue office. See the New South Wales revenue office on transfer duty for business purchases and the Victorian State Revenue Office on valuation of land for duty purposes.
Will you be charged GST, and is the sale GST-free as a going concern?
GST is not automatically payable on every insolvency purchase, but it can be a major cash-to-complete item where the supply is taxable. A business sale can be GST-free as a going concern only if the statutory conditions are actually satisfied, including that the supply is for consideration, the recipient is registered or required to be registered, the parties agree in writing that it is a going concern, all things necessary for the continued operation of the identified enterprise are supplied, and the supplier carries on the enterprise until the day of supply.
The contract has to tell you how the price interacts with GST. On an asset sale, determine whether the bid or contract price is GST inclusive or exclusive and whether any buyer-side charge has its own GST treatment. On a going-concern sale, do not rely on the label alone. If the enterprise has stopped trading or an essential asset, premises or right is missing, whether the statutory conditions are met becomes a facts question for your registered tax agent or accountant. The Australian Taxation Office sets out the plain-language conditions on its selling a going concern page, and the interpretation of the ruling behind it is a question for your registered tax agent rather than for this page.
Even recoverable GST is still a funding item. An input tax credit, where available, is claimed through the buyer's GST reporting. It does not remove the need to fund the amount the contract requires at settlement.
What happens after you win an insolvency auction?
Winning the lot starts a second checklist rather than ending the first one. The auction terms can require a buyer's premium or deposit, cleared funds by a fixed deadline, collection only after payment, proof of identity for collection and written authority if a transport company or other third party is collecting for you. Plant and equipment can also need dismantling, lifting, freight and insurance before it moves.
Bid to the landed cost, not the hammer price. Before the auction closes, know the buyer charge, GST treatment, payment method, collection deadline, loading responsibility and what happens if the item is not removed on time. The funding limit and the transport plan should be based on that total, because a machine that is paid for but cannot be collected, insured or moved is not yet a usable business asset.
What documents do you need after you pay so the asset is actually usable?
Payment does not make an insolvency purchase operational by itself. Before the appointment is finalised and the sales agent moves on, collect the evidence you will need to prove ownership, clear security interests, register or insure the asset, move it from site and refinance it later.
| Document or evidence | Why you need it | What it protects you from later |
|---|---|---|
| Executed transfer, bill of sale or sale contract | Primary evidence of the interest the seller transferred to you | Having only an auction invoice with no clear transfer document where another party later questions title |
| Paid invoice and proof of cleared funds | Shows the purchase price and that the seller or auctioneer was paid | Disputes about whether the lot was fully settled or released for collection |
| PPSR search result dated to the transaction | Records what the register showed when you bought | Trying to reconstruct the register position after a later registration change or dispute |
| Written PPSR releases, discharge undertakings or discharge evidence | Shows what secured parties agreed to release and, after discharge, that the registration has actually been ended | Owning an asset while the register or secured party still treats it as collateral |
| Third-party-owned-asset schedule | Shows which items were excluded because another party claimed ownership or a security interest | Confusing what was on the site with what was actually sold to you |
| Serial, VIN, engine or compliance-plate evidence | Connects the paperwork to the physical asset | A serial mismatch discovered when you try to register, insure or finance it |
| Collection and transport records | Shows who collected the asset and when it left the site | Damage, storage or handover disputes after the auction site has closed |
| Lease, licence and consent documents for a business purchase | Shows the buyer can occupy the premises and operate the regulated parts of the business | Settling the purchase but being unable to trade on day one |
If a PPSR registration remains after settlement, deal with it immediately. The PPSR says a secured party should end a registration when its security interest has ended and that specific timing rules can apply, including five-business-day rules in certain circumstances. If you are not the secured party and believe a registration should no longer remain, the PPSR directs you first to the secured party and also provides a formal removal process. That is why a written release or discharge undertaking obtained before the money moves is much stronger than discovering the issue when you later try to register, insure, refinance or sell the asset. Read the PPSR guidance on ending a registration and removing a registration that should no longer be there.
Insurance, registration and refinance expose paperwork gaps quickly. A funder considering equipment you already own may still want proof of purchase, clear title, releases and matching serial numbers. If the urgent purchase was funded on short-term money, the refinance out should already be planned. Our guide to financing machinery bought out of an insolvency covers the equipment-finance side of that handover.
What do assets sold by receivers and liquidators actually sell for?
There is no reliable published Australian benchmark for the discount at which assets sold by receivers or liquidators realise against ordinary market value. The useful number is therefore the value of the specific asset in its actual condition, with its actual title position, marketing period and sale terms, not a generic forced-sale percentage taken from another transaction.
What we searched for and did not find. A five provider retrieval hunt run on 4 September 2026, naming the Australian Securities and Investments Commission, the Australian Restructuring Insolvency and Turnaround Association, the Australian Financial Security Authority, the Australian Bureau of Statistics, the Australian Property Institute and Australian court judgments, returned no published figure from any of them on what assets realise in an insolvency sale measured against market value. What those bodies do publish is how many companies enter external administration, which is a different question entirely. We say what we searched for and did not find rather than that no such figure exists, because the second claim is not one anybody can make.
Why that matters to you rather than to us. A discount figure without the asset, its condition and the marketing period behind it is not information. It is an average of things that have nothing in common. Anyone quoting one is generalising from a sale you did not see, of an asset you are not buying, marketed for a period nobody told you. Used as a budgeting input it is worse than useless, because it sets an expectation the appointee has no obligation to meet and your lender will not underwrite.
What actually determines the number, qualitatively. How long the asset was marketed, because a short campaign narrows the buyer pool. Its condition and completeness, because a machine missing its tooling or a business missing its key staff is a different asset. Whether it is sold as a going concern or piecemeal, because the parts of a business are usually worth less separately than together. And the duty the appointee is under, because a controller selling under section 420A is under a duty a liquidator is not. Those four variables move the outcome further than any published average could describe.
The practical response is not to hunt for a benchmark. It is to price the specific asset, on the specific condition, with the releases you can actually obtain, and to fund it on a basis that survives a valuation done on a realisation assumption. That is the same discipline set out in the red and green flags on distressed property funding and in the comparison of dealer, auction and private sale purchases of civil plant. The equivalent question for trucks is covered in dealer against auction against private sale on low doc truck finance, and the first mortgagee angle in first mortgagee consent on a caveat loan.
| Body searched | What it publishes | What it does not publish |
|---|---|---|
| Australian Securities and Investments Commission | Insolvency statistics on companies entering external administration, and guides for creditors on each process | No figure for what assets realise in an insolvency sale against market value |
| Australian Restructuring Insolvency and Turnaround Association | Professional standards, a code of practice and member guidance for practitioners | No published realisation ratio for assets sold by its members |
| Australian Financial Security Authority | Personal insolvency statistics and the National Personal Insolvency Index | No corporate asset realisation figures, and the index is a record of proceedings rather than of prices |
| Australian Bureau of Statistics | Counts of Australian businesses, entries and exits | No sale price data for assets sold out of external administration |
| Australian Property Institute | Valuation practice standards and guidance, including guidance for mortgage security valuations | No published discount to market value for forced or insolvency sales |
| Australian court judgments | Decided cases on the duty to sell for market value, on their own facts | No dataset. A judgment about one sale is not a benchmark for yours |
Buying from a receiver or liquidator is a title, funding and handover problem before it is a bargain-hunting problem. The buyer has to identify exactly what the seller can transfer, separate PPSR registrations from ownership claims, line up funding to the seller's timetable, budget the cash items sitting on top of the bid, keep the lease and licence clocks moving on a business purchase, and collect the evidence needed to register, insure, move or refinance the asset after settlement. The lowest purchase price is not the best deal if the title is unclear, the funding is short, the asset cannot be removed or the business cannot trade on day one. The transaction works when the title path, the money path and the operating path all reach the same completion date.
Key takeaway: before you bid, know what you are buying, what has to be released, the total cash you need, how the purchase will settle and what documents make the asset usable afterwards.Frequently Asked Questions
At an insolvency auction, usually no. A successful bid is normally binding on the published auction terms, so the finance has to be ready before you bid unless the sale terms expressly say otherwise. Do not rely on residential cooling-off or subject-to-finance rules unless your solicitor confirms they apply to this exact contract.
A receiver is usually appointed by a secured creditor and exercises powers over the assets covered by the security and appointment, while a liquidator takes control of the company for the purpose of winding it up and realising its assets. The distinction changes the seller's powers, the duties that apply and what evidence the buyer should expect.
Yes, sometimes on price, the asset package, access, releases and other commercial terms, but the appointee may have much less flexibility on certainty and timing. A request that makes the sale less certain can be worth less to the estate than a cleaner offer, so negotiate the items that matter before your offer becomes binding.
The purchase can be funded with cash, asset finance, business-acquisition finance, commercial property finance, short-term property-secured funding or a combination, depending on the asset and the deadline. The key is to size the facility to the full cash-to-complete and give the funder the sale terms, asset schedule, title searches, expected releases and any lease or licence conditions before you bid.
Not automatically. A PPSR search can give important protection in the right circumstances, but the result depends on the type of asset, the security interest, the timing and correctness of the search and any relevant exceptions. At an insolvency sale, pair the search with the asset schedule and written releases rather than assuming one clear screen settles title.
Do not assume the answer from the ownership label alone. Retention-of-title, lease and hire arrangements can create PPSA security interests, and the insolvency result can depend on the agreement, perfection, priority and vesting rules. Identify the third-party claim, check the PPSR and have your solicitor confirm what the appointee can actually transfer before you include the item in your price.
Usually very few. Insolvency sales are commonly made as is, where is, with limited disclosure and broad exclusions of seller liability, so the buyer has to do more of the work that warranties would normally do. Inspect the asset, read the sale terms and verify title, condition, serial numbers and what is excluded before you commit.
There is no universal insolvency-sale deposit percentage. The auction or contract sets the amount and when it is payable, and an unconditional buyer can put the deposit at risk by failing to complete. Treat the deposit as committed money and read the default, extension and termination provisions before you bid.
The contract controls the result. Depending on its wording, late payment can lead to default interest, an extension request, a notice to complete, termination, loss of deposit and potentially a claim for further loss. Identify the problem before the completion date and have your solicitor deal with the seller in writing rather than assuming extra time will be given.
No, employment does not transfer automatically. The old employer's employment ends and employees become unsecured creditors of the failed company for what they are owed. If you offer them jobs, the Fair Work Ombudsman's position is that a new employer has to recognise service with the old employer for most entitlements including sick and carer's leave, flexible working requests and parental leave, while a new employer that is not an associated entity can choose not to recognise that service for redundancy, annual leave, long service leave, unfair dismissal and notice. That choice changes the cash you need at completion, which is why it sits in the section on what transfers rather than in a legal footnote.
Many commercial leases require the landlord's written consent to an assignment, but the answer depends on the lease. The landlord may ask for financial information, guarantees or other security, and that process can run on a different timetable from the insolvency sale. Treat consent as a pre-settlement workstream if the premises are essential to the business.
GST can be payable, but it is not automatic on every insolvency purchase. The result depends on whether the supply is taxable, how the contract states the price, the parties' GST status and whether a business sale satisfies the GST-free going-concern rules. Confirm the treatment before bidding because any amount payable at settlement is a cash-to-complete item even if an input tax credit may later be available.
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