The sale of assets, such as inventory items, securities and property, in a hurry and typically at a loss (at a price much less than its fair value or historical cost) to meet an urgent need of monetary assets. This may happen for many reasons including repayment of dues/ debts (and other types of obligations falling due). Generally, a distress sale is resorted to when an entity is going through financial pressure and hardships which give rise to a dire need of funds to meet urgent and very immediate requirements.

Examples of such hardships include business failure, decreased profit margins, declining asset values, bankruptcy, etc.