Small business startup companies are popping up all the time, especially in newer industries such as cannabis and green energy, with consistently growing markets in biotech, construction, transportation, and IT. When you are involved in a new business startup, one of the priorities will likely be gaining access to working capital that will allow the business to get off the ground while investing in marketing and product development costs. Prospective investors may not rely solely on growth potential and an aggressive 5-year revenue forecast, therefore, collateralizing your recently acquired machinery and equipment will be your strongest option.
It is important for your startup to have the best, state of the art equipment on hand to begin operations, and whether you’ve already acquired these assets with your own investment funds, or you need the capital to purchase these critical components to your business, it is important to have detailed documentation available, so investors know what they have as tangible security.
Another important step will be to engage with an experienced, accredited machinery & equipment appraiser, who can independently support the value of your assets, on both a current basis and over that 5-year initial business plan you’ve put together. The appraiser will research the industry and develop opinions of value and useful life at various levels of the market while providing sources who are familiar with the manufacturing and resale of these types of machines.
This unbiased report will bolster confidence in any parties interested in taking the ride with you during the initial phases of your startup, including private investors, financial institutions, and your traditional banking relationships. While everyone knows your integrity and prior success in business, they will look to checks and balances with their decision-making, which an independent appraisal and industry review will satisfy.
In summary, ensure you work with an appraiser who has the expertise to provide a reliable, supportable report and takes the time to understand the full perspective of your goals, as you venture forth with your startup business.