Equipment Appraisals: How Much Could You Get?
Equipment appraisals can vary depending on the appraiser. And for a lender, who the appraiser is, is critical. Sometimes, we see appraisals from people we’ve never heard of and we can’t tell how they evaluated the equipment. Unless lenders are comfortable with the reliability of the appraisal, they won’t move forward with a loan.
There are four types of valuations on equipment:
- Forced liquidation
- Orderly liquidation
- Market value
- Market value in place
Celtic Capital uses a forced liquidation valuation which tells us what we could get on the equipment should the loan against it default. Typically, 75% to 80% of that valuation is what we lend against.
If you’re looking for an equipment loan, it’s best to ask the lender you’re dealing with if it is comfortable with the appraiser you’ve chosen and if not, ask for a recommendation. If you’re selling equipment, ask the buyer for an appraiser they’d accept. The key in both situations is to know your audience and get their opinion up front.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.