The situation
A large Melbourne food processing and manufacturing business learned that a competitor had failed and gone into liquidation. The liquidator was auctioning the competitor's equipment, and much of it was specific to their part of the food industry: the kind of plant that is hard to find, expensive to buy new and slow to get delivered.
It was a rare chance to add capacity at auction prices. The catch was time. The business needed the money within 48 hours to bid with confidence and settle on the win.
Why the usual options did not fit
| Option | Why it failed |
|---|---|
| Equipment finance | Declined because of the age and uniqueness of the equipment, which made it hard for a financier to value and resell |
| A bank loan | Ruled out because the business had not yet done its tax returns, and far too slow for a 48-hour window anyway |
| Cash reserves | Not enough capital on hand to buy at that scale |
What Equity Tap did
We looked at the deal the way a business owner would. The equipment was valuable to this buyer even if a financier could not value it. The security was property, not the equipment, so its age and uniqueness did not matter to us. And because the loan was secured by real estate, we did not need the overdue tax returns to make a decision.
There was no credit committee to wait for. The decision was made quickly, the documents were turned around fast, and the funds were in place within the 48 hours.
The outcome
- The business went into the auction funded.
- It won, securing a large amount of industry-specific equipment from the failed competitor.
- It added capacity that would have cost far more, and taken far longer, to buy new.
Lessons for other business owners
Opportunities like this do not come with a month's notice. When a competitor fails, a supplier offers stock at a discount or an auction comes up, the businesses that win are the ones that can fund fast. A short-term secured loan gives you that speed, and you can refinance or repay from cash flow once the opportunity is yours.
See opportunity funding and business loans for manufacturers, or tell us about the deal. Call 1300 123 024.
Frequently asked questions
Can I get finance to buy equipment at a liquidation auction?
How fast can Equity Tap fund an auction purchase?
Can I get a business loan if my tax returns are not done?
Why did equipment finance say no?
Do you lend to manufacturing businesses?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.