Distressed deals move fast and often need creative funding. This guide is for first-time and growing entrepreneurs who want a clear map of how UK buyers typically pay for an administration or liquidation purchase. It is education only, not lending or financial advice.
Funding follows the asset. In administration you may buy a going concern (trading business, contracts, staff under TUPE, brand). In liquidation you more often buy assets only (stock, plant, IP, property). Lenders price those very differently.
Read buying out of administration and what happens in liquidation before you structure finance.
Few distressed deals are 100% cash from one account. Buyers usually blend sources:
Still the backbone. Administrators and liquidators favour certainty of funds. A deposit you can lose if you walk away is common. Keep dry powder for day-one wages, stock, and professional fees.
Bring an operator, family office, or angel who understands the sector. Equity is slower to raise than a bank line, so start conversations before you find the deal. Salvy’s daily shortlist is useful here: share anonymised entries while you line up partners, then unlock details when ready.
Finance against plant, vehicles, or receivables once title is clean. Useful after completion more than before, because insolvency sales can have retention-of-title and charge complications. Expect lenders to haircut values hard in distress.
If customers will keep trading with you, invoice finance can fund working capital after you own the book. Confirm assignability of debts and customer concentration before you rely on it.
Sometimes used when property or a quick refinance is in the plan. Expensive. Only works if you have a clear exit (sale, refinance, or equity top-up) within months, not years.
Traditional term loans for insolvency purchases are harder than for a healthy SME buyout. Specialist distressed or turnaround lenders exist, but they want an experienced team, a credible plan, and usually more equity than a normal deal.
Occasionally the administrator or liquidator will accept staged payments if you are the best (or only) credible buyer and the alternative is a worse realisation. Do not assume this. Ask early, put it in writing, and budget as if you must pay in full on completion.
In pre-packs, connected parties sometimes recycle funding structures. Independent buyers still need to show they can complete. Conflict rules and creditor scrutiny are real. Take advice.
IPs move on certainty. Be ready to show:
Over-promising kills deals. Under-capitalised offers lose to smaller, certain ones.
Salvy is an introduction and information service. We surface analysed administrations and liquidations, and we offer personal buyer and seller consultations. We do not lend, broker regulated finance, negotiate your deal, or take a success fee on completion. For lenders, solicitors, and accountants, use independent professionals.
Start with today’s Salvy Report, keep the administration buyer guide open while you call the IP, and use this page to sense-check how you might fund the close.
Not advice. Funding structures depend on your circumstances and the asset. Speak to a qualified solicitor and accountant (and, where relevant, an authorised finance broker) before you commit.
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