How Celtic Capital Evaluates Equipment

If you’re looking to offload a client and there’s an equipment piece, it’s a good idea to show us any existing appraisals you have on the equipment. That way we can see if there may be a shortfall depending on how long your loan has amortized down. And if there’s no equipment component, the equipment can be looked at as extra value.

When evaluating equipment, we use forced liquidation value. In our end of the market, companies are typically in some form of distress. If things don’t work out, we won’t have time for an orderly sale which can take from six to nine months nor does a company typically have the cash flow to operate for that long. There are significant costs associated with keeping a company running so the extent we can limit the time to go to auction, the better off the company will be.

We lend up to 80% of auction value. We have a 20% buffer in case the appraisal is off and/or to recover costs (rent, utilities, etc.). With liquidation value, we’re comfortable that if a business fails, we can collect our loan out of the equipment’s value.

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.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at