If you have received notice that your landlord is about to foreclose on your business, it is important to keep a cool head. Whether you decide to go through with a foreclosure or choose a foreclosure alternative, liquidating your assets can be key to either process.

The first step of liquidating assets is understanding what you have and what to do with it. According to the US Small Business Administration, the first thing you need to do is create a full inventory of everything related to your business assets.

What should I do as I am inventorying?

When you are creating your list of assets, you will want to include serial numbers, photographs of each item, and a general explanation of what condition each item is in. You may need to explain to creditors or potentially the IRS what items you have sold and for what prices. Having a complete inventory makes this process a lot easier.

Another thing you should do is consider donating any worn-out materials. If you do this then you will receive a tax deduction for your troubles. You do not want any worn-out materials detracting from the value of your marketable items.

Should I sell everything?

It is important to understand the value of all of your assets, which is why the inventorying process is so important. For instance, if you have a piece of heavy machinery that you are still paying off, you should not just give it back to the company to settle the debt. It is possible that you can pay off the machinery and then resell it for a higher profit as the owner.