Home
Distressed Businesses
  • All Distressed Businessess
  • Administrations
  • Liquidations
  • Winding Up
  • Insolvency Advice  New
Buy a Business
  • All Businesses for Sale
  • Find a Business for Sale
  • Raising Business Finance
  • Buyer Acquisition Service   New
  • Escrow Service   New
Sell a Business
  • Sell Your Business
  • List your Business
  • Seller Accounts
  • Need Help Selling?
  • Help With Finance New
  • Business Valuation
  • Business Wanted Adverts
Insights & News
  • View All News
  • View All Insights
  • Exclusive Insights New
Lens
  • Search all UK Companies  New
Log in
Join Now

Home / Insights / Buying Distressed Companies

Buying Distressed Companies

DISTRESSED BUSINESSES

What does the sensible buyer need to know about purchasing companies in financial difficulty?

According to Keith Steven, of the business turnaround company KSA, the primary factor to bear in mind is that companies are in trouble for a reason, and a good plan is needed in order to turn the company around. "You need to consider whether the business ­ separate from the company ­ is viable."

Additionally, if the company has gone into administrative receivership or administration, you will need to consider your legal obligations to the employees of the company, as well as obtaining permission from the courts to use the company's trade name(s).

It is very important to carry out due diligence when considering a company in financial difficulty. Any creditors guarantees made by the previous owner are likely to be worthless. A house, for example, staked as collateral against the business, may have additional preferential claims against it. And of course, the goodwill element of a business in difficulty is likely to be negligible, which on the one hand places the buyer in a position to drive down the price of the business, but on the other hand, could make future trading difficult, when creditors have been left unpaid or part-paid by the receiver, or previous owner. As well as not being able to pay its creditors, a company in trouble will often find itself short-changed by its debtors. Companies who owe you money will assume you don't have the resources to chase them through the courts and may not pay what they owe.


Share this article



Latest Businesses for Sale

Boutique Recruitment Business
London, UK

An accredited company with an excellent industry reputation. Client base includes a wealth of well-known blue-chip organisations and brands. Services an estimated 400 active clients and benefits from high retention rates, with approximately 80% of cl...

Asking Price: Offers Invited
Turnover: £1,000,000

RELOCATABLE


River-Front Restaurant
Gloucestershire, South West, UK

This is a well-established restaurant with a renowned reputation amongst local residents. This is a superb opportunity to take on a high turnover local business in an area teeming with customers. The business was founded in 2007 and has flourished un...

Asking Price: Offers Invited
Turnover: £526,777

LEASEHOLD


Designer, Manufacturer and Fabricator of Metal Components
South East, UK

Designs, manufactures and installs a range of lift and escalator components for clients within the construction industry, including car interiors, gear rafts, lift cars and slings, landing door seals, tracks, brake shoe linings and division screens...

Asking Price: Offers Invited
Turnover: £3,120,000

LEASEHOLD



View more businesses for sale

Search Insights

Latest Insights

A comparison of the private company M&A landscapes in the US and UK

FOR BUYERS

So you don’t have enough money to buy the business?

FOR BUYERS

How do you know when the right time is to sell your business?

FOR SELLERS

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Insight Categories

  • - For Buyers
  • - For Sellers
  • - Distressed Businesses
  • - Industry Insights
  • - Sector Guides

View all insights

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources

Become a Member

About Us

Business Sale Report is the UK's leading independent business for sale & distressed business listing service. Established in 1995, the report offers an up-to-the-minute, comprehensive overview of businesses for sale, latest distressed business listings and daily acquisition news.

Our Services

Businesses for Sale
Distressed Companies
List a Business
Help with Finance
Buyer Acquisition Service
Small Businesses for Sale

Company

About Us
Insights
News
FAQs
Reviews
Terms & Conditions
Privacy Policy

Get In Touch

020 8875 0200
[email protected]
167 Oakhill Road, London, SW15 2QW
Working hours: Mon-Fri, 9am - 5:30pm


Sign up to our free newsletter



© 1995-2022. Business Sale Report Ltd. All rights reserved. www.business-sale.com.