Equipment Appraisal Blog | Understanding Machinery Appraisals

Roll On! Using Fleet Transportation Vehicle Appraisal to Optimize Operations

Posted by Equipment Appraisal Services on Mon, Aug 19, 2019 @ 08:00 AM

Fleet Transportation Appraisal

Is your company on the move? It's not unusual for businesses today to have a fleet of vehicles available for getting technicians to and from customer locations, making deliveries and improving brand recognition to the general public. But did you know that you can use that very functional part of your business to optimize your company's overall operations? Here's a quick look at how using a fleet transportation vehicle appraisal can help you grow your business.


Roll On! Using Fleet Transportation Vehicle Appraisal to Optimize Operations

Businesses have vehicle fleets to meet a number of different needs. They're used to create a unified brand image for their service vehicles while ensuring that everything their technicians need to get the job done is installed and ready to go. They're used to build brand image when luxury vehicles are driven by upper management or used to pick up other business executives at the airport prior to a big meeting. They're used to build brand recognition by the general public when they're driven down the road during everyday operations. They provide verification of intent when your delivery truck pulls up to a home or job site, setting people's mind at ease.

But over time, these vehicles wear and age. This can make it difficult to determine what their value should be on the accounting books. It's easy to simply depreciate vehicle value for tax purposes on the accounting books, but what about when you're still getting value out of that car, truck or van years after it's been fully depreciated? How do you use that value to your company's position in the market and capacity for growth?

When you're trying to secure financing to expand your operation, valuing all of your assets is important to presenting a realistic picture of your company's finances, not just the value of the assets that still have value in tax depreciation tables. Your business' vehicle fleet can be a good source of unrecorded value for your business, as it may have vehicles that have been completely depreciated but do not yet require replacement.

Knowing the value of these hidden assets allows you to leverage them to the best of your ability, whether applying for a loan or trading in a vehicle for a newer model. Unfortunately, if you choose to have the dealership you're working with determine the value, they may underestimate or overestimate the value, depending on their purposes and which option they feel will best benefit them and help close the deal. A van that could be used for years can be declared as only being fit for the junkyard, or a sedan that's truly worn out may be given a higher value to help make a sale.

By having a fleet transportation vehicle appraisal performed, you can use that information to decide when it's time to replace aging assets and when you should hang on to those assets a little longer before investing in new vehicles. However, trying to make this decision without having the level of information available in an appraisal report from an accredited equipment appraiser can make that decision difficult at best. Make sure that you're working with a properly accredited appraisal specialist to ensure that you're getting an independent opinion on the value of your fleet vehicles.

Tags: Fleet Transportation Appraisal

Growing with the Building Boom: Construction Contracting Asset Appraisal

Posted by Equipment Appraisal Services on Mon, Aug 05, 2019 @ 08:00 AM


construction contracting

Despite a slight downturn in the early part of this year, construction spending is forecasted to begin climbing again. Is your business positioned to expand operations by buying new equipment, adding new crews or purchasing new software? Securing capital to deal with issues such as this often means getting a business loan. But how do you accurately estimate the value of your business assets to secure that loan or sell in favor of newer or better machinery? A construction contracting asset appraisal can help. Here's how:

Growing with the Building Increase: Construction Contracting Asset Appraisal

Working in construction demands a certain amount of market savvy to understand the cycles the industry moves in. Preparing for those changes often means having a good grasp of the value of your construction equipment assets. Why? As the equipment ages or is used on the job site, it begins to lose value. At the same time, newer, larger projects demand better equipment. It's difficult to go into the negotiating process if you don't know what your current equipment is worth and how it can be used to offset the expense of the replacement equipment.

Expanding your business means that you'll need capital, whether it's to take on new crew, buy new machinery or explore new opportunities. But where is that capital going to come from? Though you can get a business loan, if your business' credit history has had any shaky points, you may not be able to secure the best available rates. This is one area where being able to use the capital tied up in asset value can be beneficial to your company. 

A financial institution that may not be willing to issue a loan or that is charging a higher interest rate may be willing to negotiate if they feel that their interests are being protected. If you can offer substantial collateral on the loan, such as the value of your equipment assets, you're able to bring something more to the table that allows them to make a better offer.

But how do you prove exactly what your machinery is worth so that the bank feels comfortable in negotiating its loan terms with you? You could have an equipment retailer estimate the value of the machinery, but their estimate is going to be based on what their current interests are, so they may not provide you with an accurate assessment of value.

Basing your equipment values on what similar machinery is being sold for in a magazine or online will only provide you with a rough estimate and may not take the condition of the equipment into account. Working with a certified equipment appraiser is the only way to provide your financial institution with equipment values that are based on tested methodologies that will hold up to strong scrutiny in a range of situations.

By having a construction contracting asset appraisal performed on your company's essential equipment, you can use idle equipment as collateral for a loan, make smart decisions about what equipment to keep and what equipment to sell and replace or have documentation estimating the value of your machinery for an insurance claim. Whatever you decide, make sure you're working with a certified equipment appraiser to ensure that you're getting an accurate value for your construction and contracting equipment.

Tags: Construction Contracting