Lender Applications And Definitions
Lenders appreciate the accuracy and security of a certified appraisal report prepared by a Certified Machinery & Equipment Appraiser (CMEA) when handling the applications listed below.
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Book value is typically inaccurate and outdated, unlike fair market value which gives a solid current value conclusion. If machinery and equipment are not appraised correctly, the entire business valuation is skewed, potentially putting a business at risk and increasing its liability.
When a business sells its assets, fixed and tangible assets often must be valued separately from the business’ intangible assets.
A certified appraisal report of tangible assets is required when a business owner is seeking to obtain the maximum loan amount from a lender. Businesses often use their tangible assets as collateral to support these loans, and typically the loan amount is derived from 40-60% of the value of the pledged assets.
Many businesses lease equipment and are offered a purchase option at the termination of the lease. This option typically stipulates fair market value as the buy-out price. We can help determine this value and assist in purchase negotiations.