Commercial Finance Professionals Take Note: Recent Poll by DailyDAC Reveals that Your Collateral Sales Are Not Producing Highest Values.

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Asset-based lenders, workout groups, and special situations groups at banks foreclose on and sell borrowers’ assets with great frequency. These sales typically result in proceeds that are not sufficient to pay off the secured lender in full. Is that because the assets simply are worth less than what is owed? Or do assets sell for less because these sales are not well marketed? A recent survey conducted by DailyDAC suggests the latter.

Today’s buyers are seeking alternative channels to source deals and are more frequently turning to online resources to source their deals

As thousands of commercial bankers and other lenders gather in New York City for the 67th annual meeting of the Commercial Finance Association (the "CFA"), a recent survey conducted by DailyDAC reveals a result that should be of interest to lenders’ workout and special asset groups that are charged with maximizing recovery on defaulted loans.

DailyDac sent its survey to more than 15,000 private equity fund principals and their attorneys, accountants, and investment bankers. According to the survey, advertising collateral sales in newspapers (whether these sales occur through Article 9 of the Uniform Commercial Code, a receivership, and assignment for the benefit of creditors, or bankruptcy) is increasingly less effective because the likely buyers of such collateral simply do not read newspapers as they once did.

Most buyers, both financial and strategic, rely on their personal networks to advise them of deals they may have an interest in and on the growing number of online platforms that match buyers and sellers, such as Axial Markets, CapXG, MergerMarket, PEGBASE, and PE-Nexus. However, “while some of these platforms are excellent,” according to Kathleen Parker, a director with DailyDAC, LLC, “the common element among all of them is that they focus on healthy M&A. DailyDAC, in contrast, has a focus on distressed M&A.”

“Larger situations tend to get plenty of press and the magnitude of associated sales generally justifies the retention of investment bankers and other professionals, who can do a tremendous job of making sure that assets are adequately marketed,” according to Jonathan Friedland, a partner with Levenfeld Pearlstein, LLC, “but the vast majority of distressed sales occur in the lower middle market with less help from professionals.”

DailyDAC provides an online marketplace featuring lower and middle market distressed asset sales. Listing an opportunity is totally free and, because its readers are paid subscribers, they are motivated buyers compared to today’s readers of general circulation newspapers. “Today’s buyers are seeking alternative channels to source deals and are more frequently turning to online resources to source their deals,” according to Parker.

More About DailyDAC:

DailyDAC is a subscription-based deal aggregator focused on lower middle market, time sensitive situations. DailyDAC provides subscribers with opportunities to purchase or provide capital to non-public companies and/or their assets.

By culling information from thousands of public sources and cultivating relationships with hundreds of professionals, DailyDAC locates deals involving: stressed and distressed companies, including those in bankruptcy, receivership and assignment; owners who must sell for personal reasons; and start-up companies looking for capital quickly.

DailyDAC charges no finders’ fees or commissions. For more information, go to http://www.dailydac.com and opt in to receive the non-actionable version of DailyDAC’s twice-weekly electronic newsletter, which includes original and aggregated news of interest to its narrow demographic of high net worth, sophisticated, opportunistic investors.

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Kristen Weber
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