SBA Equipment Appraisals
Small businesses provide the backbone for America. Whether you are starting a business or buying a small business, financing is often needed. The SBA’s mission is to provide SBA loans for small businesses to help with financing needs. When seeking an SBA loan, the lender may request an SBA machinery and equipment appraisal. Equipment appraisals play an important role in supporting collateral for loans. Below we discuss important items to know when seeking or obtaining an SBA equipment appraisal.
Peak Business Valuation is a reputable machinery and equipment appraiser. We perform SBA equipment appraisals every week. Our team consists of certified machinery and equipment appraisals. As such, we have the expertise to perform quality SBA equipment appraisals. Get a free quote by scheduling a consultation below.
Need for an SBA Equipment Appraisal
The U.S. Small Business Administration (SBA) assists small businesses with financing needs. To qualify for an SBA loan, the business must have sufficient collateral. Therefore, a machinery and equipment appraisal is often required for the loan application. The standard operating procedure requires an independent certified appraiser to complete it.
A certified equipment appraisal verifies company assets and provides an assessment of value. In addition to loan applications, an equipment appraisal can determine the value of equipment for insurance coverage, tax reporting, and business transactions or equipment transactions. Peak Business Valuation commonly provides equipment appraisals for individuals buying a business, starting a business, or buying equipment.
Information Needed for an SBA Equipment Appraisal
To obtain an equipment appraisal the certified machinery and equipment appraisal will request the following information:
Fixed Asset list with:
- Serial Number
- Maintenance Schedule
- Depreciation schedule (if needed)
During a consultation, the equipment appraiser will discuss the scope of the project, pricing, and turnaround time. Once an engagement letter is signed, we collect the needed documentation and perform a site visit if needed.
Peak’s Credentials for SBA Equipment Appraisals
Peak Business Valuation provides USPAP-compliant machinery and equipment appraisals. Our team consists of certified machinery and equipment appraisals (CMEA). We perform SBA equipment appraisals for more than 80 SBA lenders across the country. As such our machinery and equipment appraisals meet the SBA’s standard operating procedures requirements and are USPAP compliant.
SBA Equipment Appraisals for 7(a) Loans
The SBA 7(a) loan program is commonly used to finance small business needs. Some of the common reasons to obtain an SBA loan are for buying a business, financing equipment, refinancing business debt, and funding working capital, among others. Depending on the company and the purpose of the SBA loan a qualified equipment appraisal can be an essential part of the process.
SBA Equipment Appraisal Site Inspection
As Peak Business Valuation is performing a machinery and equipment appraisal a site visit may be requested. During this visit, the equipment appraiser will take notes and pictures. This is to ensure all information is accurate. The certified equipment appraiser may also ask questions about the working condition and maintenance of the machinery and equipment. After the site visit, the equipment appraiser will analyze the data and prepare a valuation report outlining the equipment’s value.
Determining the Value of Equipment for an SBA Equipment Appraisal
Next, an appraiser may rely on the following methods to value equipment based on the purpose of the machinery and equipment appraisal and the intended user. The equipment appraiser will determine the collateral value or fair market value of the assets used to secure a loan. Lenders often use this value to estimate the risk level of a SBA loan application.
- Sales Comparison Method. Using this method, an equipment appraiser analyzes the market for new and used equipment to determine fair pricing for the asset. A machinery and equipment appraiser can determine this by analyzing recent sale prices of similar assets and recent tax assessments.
- Cost Method. An equipment appraiser uses this method for unique or custom equipment with little market demand. It determines a replacement cost for the asset. This also considers the machine’s remaining life, depreciation, and current condition.
- Income Method. A certified machinery and equipment appraiser uses this when the equipment connects to revenue and the benefit can be tracked. This method values equipment at the level of income it generates.
Common Industries for SBA equipment appraisals
Peak Business Valuation commonly provides SBA equipment appraisals for the following industries.
- Manufacturing Equipment
- Construction and Heavy Equipment
- Food and Hospitality Equipment
- Medical Equipment
- Transportation and Logistic Equipment
- Various other Machinery and Equipment
To determine whether your business needs an SBA equipment appraisal, schedule a consultation today!
Quality Certified SBA Equipment Appraisals
Peak Business Valuation provides certified machinery and equipment appraisals for a variety of industries. Our SBA equipment appraisals are accurate and reliable. They stand up to scrutiny from the IRS, lenders, and SBA. The team at Peak is happy to provide your SBA lender with a high-quality certified SBA equipment appraisal. Our machinery and equipment appraisals meet USPAP and SBA requirements. Schedule your consultation below to get a quote!