Bankruptcy is a word which carries distinct connotations and many people still feel that it carries a certain stigma. In...
For a number of reasons, there will always be companies which are under such serious financial pressure that they have no option but to go through company liquidation, even if their underlying business was inherently viable.
A viable business is a valuable thing and as a whole is greater than the sum of its parts. Where liquidation would involve selling these parts for the best possible price, a pre-pack business sale involves selling the functioning business in its entirety, complete with assets, staff, business relationships etc already established. This allows the business to continue trading while the often debt laden company that owned it gets a better price from the sale, in order for its creditors to receive more than they would otherwise.
Buying a Pre-Pack Business
In a Pre-Pack Administration, preparation is key. The arrangement to buy the business of an insolvent company is negotiated and arranged prior to the formal appointment of Administrators, with the actual sale taking place when the appointment is made, or very soon afterwards.
There are a lot of checks and balances which must take place when a pre-pack is being arranged and one of the key aspects of this arrangement is establishing that the proposed purchaser is in a position to buy as speed is of the essence in this kind of transaction.
Buying a business at any time requires a considerable outlay and as such, whoever the interested buyer might be, they must be able to demonstrate that they have or are able to raise the funds required to make the purchase. With that in mind, Pre-Pack Business Finance is funding arranged specifically for the purpose of a new or existing company buying the functioning business of a company that’s about to close through insolvency.
Arranging Pre-Pack Business Finance
Pre-Pack business Finance is a fairly specialist field of lending, however, at Lines Henry, we have good working relationships with a number of lenders who understand the purpose of such an arrangement, are supportive of the pre-pack concept and are aware of the necessity for speed when making the arrangement.
As with any of the services we provide, we offer a free consultation to discuss your situation and advise what to do next. Either as the Director of an insolvent company about to enter administration, as the Director of a new or existing company looking to purchase a pre-pack business, or, as is often the case, as the director of both the new company looking to make the purchase and the old company about to be closed.
Contact us and let us set you on the right path for you in your own particular circumstances.
