Maximizing Returns When Selling Equipment from a Closed Business
Do you suddenly find yourself asking the question how do I sell the equipment from my closed business? Closing a business can be one of the most challenging experiences for any business owner. Beyond the emotional toll, there's the practical matter of what to do with your equipment and assets. The good news is that selling your business equipment can recover significant value and provide closure during this transition period.
At Grafe Auction, we've been helping business owners sell equipment from closed businesses since 1959. Our experience has shown that with the right approach, you can maximize returns and make the process as smooth as possible.
Creating an Inventory of Equipment to Sell
The first step in selling equipment from a closed business is determining exactly what you have to sell. Creating a comprehensive inventory helps you organize the process and enables potential buyers to understand what's available.
Equipment commonly sold at business liquidation auctions includes:
- Food Service Equipment
- Restaurant equipment (ovens, grills, refrigerators)
- Commercial kitchen equipment (mixers, food processors, prep tables)
- Grocery store and supermarket equipment (display cases, coolers, shelving)
- Manufacturing and Industrial Equipment
- Woodworking machinery
- Machine shop equipment
- Metal fabrication tools
- Production line systems
- Other distribution center assets
- Retail Fixtures and Assets
- Store fixtures and shelving
- Display cases and mannequins
- Cash registers and POS systems
- Inventory and merchandise
- Office Assets
- Furniture (desks, chairs, conference tables)
- Electronics (computers, phones, printers)
- Art and décor
- Office supplies
- Specialized Equipment
- Fitness and gym equipment
- Medical and dental equipment
- Educational and classroom supplies
- Construction tools and machinery
- Vehicles and Transportation
- Delivery trucks
- Forklifts and pallet jacks
- Company cars
- Commercial Real Estate
- Buildings
- Land
- Warehouses
Understanding Financial Obligations
Before selling your business equipment, it's essential to understand if there are any liens or financial obligations attached to these assets.
If You Owe Money on Your Equipment
When you have outstanding loans on equipment you intend to sell, follow these steps:
- Contact your creditors: Communicate your intention to sell the equipment.
- Review loan agreements: Understand your obligations regarding sale of collateral.
- Negotiate payoff amounts: In some cases, creditors may accept less than full payment, especially if the equipment value has depreciated below the loan amount.
- Understand priority of payment: Proceeds from equipment sales typically go first to secured creditors up to the amount you owe them.
Special Considerations for SBA Loans
If your business equipment was purchased with a Small Business Administration (SBA) loan, there are additional requirements:
- SBA loans often require specific notification procedures before selling collateral
- Your lender may need to approve the sale method and minimum acceptable prices
- Additional documentation is typically required
- The SBA may have specific requirements for the auction or sale process
Options for Selling Your Business Equipment
When it comes to liquidating business assets, you have several options, each with its own advantages and disadvantages:
Selling Directly to Equipment Dealers
Pros:
- Fastest access to cash
- Minimal effort required
- One-stop solution for multiple items
Cons:
- Typically offers lowest return (30-50% of fair market value)
- Dealers only buy what they can easily resell
- May need to find multiple dealers for different equipment types
Equipment dealers need to purchase at wholesale prices to make a profit when reselling. While this option provides quick cash, it generally yields the lowest return on your assets.
Selling Directly to Similar Businesses
Pros:
- Can yield higher prices (60-80% of new value for good condition items)
- No commission fees
- May build goodwill in your industry
Cons:
- Time-consuming process
- Requires significant effort to find buyers
- Cherry-picking of best items often occurs
- May leave less desirable equipment unsold
This approach can work well for high-value specialty equipment but becomes increasingly challenging for complete liquidation of all assets.
Selling Through Auction
Pros:
- Competitive bidding drives prices up
- Comprehensive solution for all equipment
- Professional marketing reaches motivated buyers
- Complete closure in a defined timeframe
- Minimal work required from you
Cons:
- Takes 2-4 weeks from start to finish
- Includes commission fees (offset by higher sale prices)
- Less control over final prices
Auctions create a competitive environment where interested buyers bid against each other, often resulting in optimal market prices for your equipment. The competitive nature of auctions frequently generates higher overall returns than private sales, particularly when selling a complete business worth of equipment.
Why Choose Auction for Business Liquidation
Auctions have become the preferred method for business liquidation for several compelling reasons:
1. Market-Driven Pricing
Auctions let the market determine the true value of your assets. When multiple interested buyers compete for items they want, prices naturally rise to what the market will bear.
2. Complete Liquidation
Unlike other methods where only the best items sell, auctions can move your entire inventory in one event. This comprehensive approach prevents you from being left with unwanted items.
3. Defined Timeline
Auctions operate on a set schedule, giving you a clear endpoint for the liquidation process. This timeline allows for better planning during your business transition.
4. Professional Marketing
Professional auction companies like Grafe Auction implement comprehensive marketing strategies to reach targeted buyers interested in your specific equipment. This specialized marketing often brings in buyers willing to pay premium prices for quality equipment.
5. Minimized Effort
A full-service auction company handles the entire process—from inventory and cataloging to marketing, sales, and removal—allowing you to focus on other aspects of your business transition.
6. Transparency
The open, public nature of auctions ensures a fair process for all parties involved and eliminates concerns about undervalued private sales.
The Auction Process at Grafe Auction
When you choose Grafe Auction to sell your business equipment, here's what you can expect:
- Initial Consultation: We'll discuss your equipment, timeline, and goals.
- Site Visit: Our team will evaluate your equipment and develop a customized auction plan.
- Preparation: We'll catalog, photograph, and organize your assets for presentation.
- Marketing: Your equipment will be marketed to our database of over 229,000 active bidders plus targeted advertising to reach new potential buyers.
- Auction Event: We'll conduct a professional online auction with competitive bidding.
- Payment Processing: We'll collect payments from buyers promptly.
- Removal Coordination: We'll oversee the removal of sold items, ensuring your property is left in broom-swept condition.
- Final Settlement: You'll receive the proceeds from your auction, typically within 10-14 business days of the auction's conclusion.
Maximizing Your Equipment's Value
To get the most from your business equipment auction:
- Gather Documentation: Collect all owner's manuals, maintenance records, and warranty information for your equipment.
- Basic Cleaning: Clean equipment makes a better impression. You don't need to refurbish items, but basic cleaning helps.
- Organize Equipment: Group similar items together where possible to help with the cataloging process.
- Identify Key Features: Make note of any special features, upgrades, or recent maintenance that might increase value.
- Be Transparent About Condition: Honesty about equipment condition builds trust with buyers and prevents post-sale issues.
Conclusion
Selling equipment from a closed business doesn't have to be overwhelming. With the right approach, you can maximize returns and simplify the process. At Grafe Auction, we specialize in helping business owners through this transition with professional service and maximum returns.
Since 1959, we've developed expertise in marketing and selling business equipment across numerous industries. Whether you're selling restaurant equipment, retail fixtures, manufacturing machinery, or office assets, our team has the experience to help you achieve the best possible results.
Ready to discuss how we can help you sell your business equipment? Contact us today for a free consultation and learn how our auction services can provide the best return with minimal effort on your part.
Not ready? Learn more about selling with Grafe Auction.