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What is a Machinery and Equipment Appraisal?

What is a Machinery and Equipment Appraisal?

Small businesses across the country rely on machinery and equipment for business operations. As such, machinery and equipment appraisals are important for many small businesses. Below we answer the question “What is a machinery and equipment appraisal?”. We also discuss common businesses that need a machinery and equipment appraisal. Finally, we end with several reasons to obtain an equipment appraisal including when you might need one. 

Peak Business Valuation is a top machinery and equipment appraiser. We provide machinery and equipment appraisals for companies across the United States. To learn more about obtaining an equipment appraisal, schedule a free consultation today! We are happy to answer your questions about machinery and equipment appraisals! 

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What is a Machinery and Equipment Appraisal?

A machinery and equipment appraisal determines the value of specific assets. There are various scenarios for a company or lender to order one. We discuss just a few of the times to obtain a machinery and equipment appraisal below. There are two types of equipment appraisals. First, a summary machinery and equipment appraisal report. And second, a desktop machinery and equipment appraisal report. The first includes an onsite inspection, to confirm the location of the assets, verify details, and the maintenance and condition of the assets. The second does not include a site visit. During a consultation, the equipment appraiser will determine what type of equipment appraisal will best meet your needs. In short, an equipment appraisal is an assessment of the value of a business’s machinery and equipment. 

Common Businesses that Need a Machinery and Equipment Appraisal

Below we discuss some of the common small businesses that often need a machinery and equipment appraisal. This list is not exhaustive. As such, if you have questions about obtaining a machinery and equipment appraisal for your business, schedule a free consultation. Peak Business Valuation as a top machinery and equipment appraiser is happy to help! 

  • Construction Companies. Machinery and equipment appraisals for construction companies are frequently needed. Some of the assets a business appraiser analyzes the value of include: water equipment, pumps, loaders, drills, cranes, bulldozers, forklifts, excavators, compactors, dump trucks, etc… Heavy equipment appraisals are one of the most common machinery and equipment appraisals we perform. 
  • Contracting Businesses. Many contracting businesses rely on machinery and equipment. As such, reach out to obtain a machinery and equipment appraisal for a contracting business. 
  • Manufacturing Companies. Manufacturing equipment appraisals are common for businesses with equipment such as presses, transformers, woodworking machines, and welding machines, among others. 
  • Medical Businesses. In the medical industry, there are many businesses that may need a machinery and equipment appraisal. If you are buying or selling surgical, dental, physical therapy, veterinary, chiropractic, cardiology, and endoscopy equipment you may need a medical equipment appraisal
  • Food and Hospitality Businesses. Businesses in this industry particularly restaurants often need an equipment appraisal. Some of the common assets in this industry include bakery equipment, bar and grill appliances, restaurant equipment, hotel and resort furniture and fixtures, spa and tanning salon equipment, sporting goods, fitness equipment, and others. 
  • Businesses with any type of fleet. Many businesses rely on trucks and vehicles for operations. Common equipment for an equipment appraisal includes automotive vehicles, buses, limousines, boats, and various trucks. 
  • Hi-Tech and General Equipment. From auto repair to office equipment, furniture, fixtures, and phone systems, many business operations rely on machinery and equipment. Depending on the type of equipment, you may need a separate machinery and equipment appraisal from the business valuation. 

During a consultation with Peak Business Valuation, we can help you determine whether a machinery and equipment appraisal is needed. If we do not discuss your business or type of equipment above, please schedule a consultation. An equipment appraiser at Peak Business Valuation is happy to discuss your machinery and equipment appraisal needs. Schedule a free consultation below! 

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Reasons to Obtain a Machinery and Equipment Appraisal

There are several reasons to obtain a machinery and equipment appraisal. Below we highlight just a few of the times you may need a machinery and equipment appraisal. 

  • Buying a Business

 If you are buying a business with specific machinery and equipment you may need a machinery and equipment appraisal. Above we highlight some of the common businesses for a machinery and equipment appraisal. Depending on the business, a significant amount of the value lies in the business’s assets. 

  • Financing a Small Business

If you are seeking financing for a small business, the lender may request not only a business valuation but also a machinery and equipment appraisal. Doing so helps ensure collateral for the loan and that the business has sufficient cash flow to cover business expenses. An equipment appraisal is often a part of the loan application process

  • Selling Equipment

If you plan on selling machinery and equipment, it may be difficult to understand how much it is worth. A machinery and equipment appraisal will determine a fair value. During the appraisal, a machinery and equipment appraiser analyzes similar assets, useful life, condition, maintenance, and other factors. 

  • Insurance Coverage

An equipment appraisal is often needed when determining insurance coverage for machinery and equipment. Having accurate coverage can ensure protection and avoid the risk of being underinsured. An equipment appraisal helps determine the replacement value. 

  • Tax Reporting

A machinery and equipment appraisal provides credible documentation of asset values and depreciation. This aids businesses in meeting tax reporting regulations. 

  • Securing an SBA Loan

A lender may order a machinery and equipment appraisal when assessing the collateral for an SBA loan. The machinery and equipment of a business can provide support to aid in lending decisions. 

  • Asset Management

Last, an equipment appraisal can determine the value, condition, and useful life of machinery and equipment. This can help a business owner optimize equipment use, plan for effective maintenance and repair, and strategically upgrade and replace. An equipment appraisal assists in strategic financial planning. 

Summary

There are many aspects to understand when seeking an equipment appraisal. As such, it is best to work with a qualified equipment appraiser. Peak Business Valuation is a certified machinery and equipment appraiser (CMEA). We perform machinery and equipment appraisals for individuals and lenders across the country. For additional questions about what is a machinery and equipment appraisal or to start a machinery and equipment appraisal, schedule a free consultation

To learn more about specific types of machinery and equipment appraisals, see the following articles:

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