Equipment Appraisal Blog | Understanding Machinery Appraisals

Is it Time to Consider Refinancing Your Capital Machinery & Equipment

Posted by Equipment Appraisal Services on Mon, Nov 29, 2021 @ 07:00 AM

Equipment Appraisal Appraiser Refinancing Tangible Assets

We have all seen or heard about the recent economic trends which have led to significant reductions to interest rates across broad spectrums of the consumer and business markets. The thought has likely crossed your mind to take advantage of these low rates when considering new equipment and personal property investments.

What about the existing capitalized assets you have owned for a few years and continue to work every day for your business? It might be time to look at refinancing options and take advantage of these low-interest rates before the markets start turning in the opposite direction.

Refinancing has several advantages to business owners who have considerable amounts of owned machinery & equipment. The two most significant are (a) the potential to lower your monthly debt payments where you have existing higher rate loans, and (b) the ability to access working capital based on the equity in your assets.

It is important to review your current debt structure and determine if existing loans can be restructured without a significant pre-payment penalty. Working with your present financial institutions should be a primary choice as they can often pre-approve your credit-based upon past transactions, and waive any penalties, provided you keep your business with them. Typically, pre-payment penalties expire after a couple of years, however, so be sure to read your loan contracts to better understand the terms and conditions.

The equity in your machinery &apm; equipment can be tapped if you have no or low debt obligations, and the cash can be used to inject working capital into your business, which then can be used for any number of new projects or growth plans. These assets have been capitalized and depreciated significantly on your books, however, their actual market value will likely be much higher.

To take advantage of this equity and support your assets’ current value, you should consider engaging an accredited, experienced machinery & equipment appraiser, who will complete a desktop or on-site valuation of your company’s tangible property. The appraiser will facilitate the process for you and suggest certain options that make the most sense in the context of your particular business and overall goals.

If you believe now is finally the time to start taking advantage of these favorable market conditions and low-interest rates, start taking these steps to make your financing plans a reality.

Tags: Equipment Appraisal, accredited appraisers, Machinery & Equipment Appraisals, refinance

Supply Chain Bottleneck Effects on Valuing Import/Export Businesses

Posted by Equipment Appraisal Services on Mon, Nov 15, 2021 @ 07:00 AM

Machinery Equipment Appraisal Supply Chain Crisis

By now, most people are aware of the supply chain crisis and its impact on many parts of our lives, both personal and business. Facing some of the worst of these issues are international importers and exporters who are experiencing unprecedented increases in product costs associated with purchasing, shipping, handling, and significant delivery delays.

From an appraiser's perspective, questions have arisen regarding the impact of this global problem when it comes to valuing the equipment, personal property, and inventory of the assets for these businesses.

Historically, appraisers have largely been engaged to assist in the customs process, which requires an appraisal on property being shipped overseas. While valuation companies are still involved in this area, the overall marketplace and the effects on both new and used machinery & equipment, as well as how long this crisis might persist, is the more prevalent topic today.

Supply chain issues are affecting other businesses on varying levels as well. A good example is the automotive industry. The new vehicle shortage they are experiencing has led to a sharp increase in prices for both new and used cars and trucks. Delivery delays are also causing significant price increases at grocery stores, furniture retailers, building construction firms, manufacturing companies, and others.

When valuing machinery & equipment in these markets and industries, an appraiser will research and analyze each situation, and determine a reasonable approach to measuring this impact, especially if they believe these supply chain issues are going to continue well into the coming year. Given the uniqueness of this situation, this will likely involve a subjective opinion from the appraiser based on the information uncovered, the level of change from more normal conditions, and the short or long-term effects this will have on the market and the assets involved.

When the need for an appraisal occurs in your import or export business, ensure that you engage with an accredited or certified valuation expert with the experience required to deliver reasonable and supportable opinions.

Tags: equipment values, machinery appraisal, import, export, supply shortage, supply chain

Recent Uptick in Divorce Cases - How Appraisers Assist in the Process

Posted by Equipment Appraisal Services on Mon, Nov 01, 2021 @ 07:00 AM

Machinery Equipment Appraisal Appraiser Divorce

It may be an anomaly brought about, in part, by the pandemic, or it might just be a coincidence. The fact is that we are seeing a lot more divorce cases happening in 2021 than in previous years. As a result, requests for valuation services in this arena have been on the rise.

Equipment and business appraisers have been busy working with divorce attorneys and their clients, as the age-old dispute between separated spouses revolves around a fair separation of assets. When both parties are co-owners in a business, there is going to be a need for an independent appraisal from an experienced valuation firm, which can look to assist in facilitating a settlement. If the shared business includes significant tangible assets, such as construction and manufacturing machinery, trucks and trailers, or any type of personal property, the need for an accredited machinery and equipment appraisal will be important. A certified business appraiser will then consider these tangible values in their overall analysis.

Appraisers act as unbiased neutral parties, providing a fair market value for your equipment and associated business. The intention is to put to rest the concerns either party may have in regard to prior assumptions or discussions on their company’s worth.

In certain cases, both sides in the divorce will engage their own appraisers with the potential for arbitration or litigation to determine the most credible report or allow consideration to both valuations if they are not too far apart. Regardless of the circumstances, it is important to engage with an accredited or certified appraiser with the experience and credentials to effectively assist in the process.

If the business is still operating and in decent financial shape, the Fair Market Value of the assets would be the appropriate measurement level. If the company has been recently idle, or there are plans to close up shop in the very near future, a liquidation premise may need consideration. Ideally, both parties are on the same page with the overall process, however, if this is not the case, the party who engaged the experienced appraiser should have an advantage in the ongoing proceedings.

Understanding all that is involved during a divorce, including the need for an accredited or certified equipment appraisal can ensure you are receiving the best settlement possible.

Tags: Divorce, equipment appraisers, Valuing Equipment for Divorce Purposes, Machinery & Equipment Appraisals