Equipment Appraisal Blog | Understanding Machinery Appraisals

What Trump's Policies Mean for Appraisals for SBA Loan Purposes

Posted by Equipment Appraisal Services on Tue, Feb 07, 2017 @ 09:15 AM

appraisals for SBA loan purposes.jpg

With the inauguration of President Trump, we can expect to see changes in how business is done in our country. One area that may be impacted is appraisals for SBA loan purposes. Will you need to have equipment values to get a loan? Will having a machinery valuation from a certified equipment appraiser improve your chances of being approved? Let's take a look at some signs of what may lie ahead in Trump's administration.

What Trump's Policies Mean for Appraisals for SBA Loan Purposes

As a businessman, President Trump has regularly mentioned his plan to grow the economy and American way of life through the promotion and growth of domestic businesses of all sizes. Many people are hoping that this will translate into policy changes that benefit small business owners and entrepreneurs, especially with positive changes in the Small Business Administration. Unlike several of his more controversial appointments, the President's appointment of Linda McMahon to head the organization was approved by an overwhelming majority of 18-1 by the Senate Small Business and Entrepreneurship Committee.

But what does this mean? It could suggest that neither side finds any problem with McMahon, which could be good or bad. She could promote strong changes in the SBA, or she could simply keep it business as usual, making her a non-threat to the establishment in Congress. That being said, she has shown the ability to grow a small regional business into a multi-national corporation, so she may be able to shake out some of the existing bureaucracy in favor of effective updates to the administration.

If the changes favor more available SBA-backed loans, businesses that would otherwise not be approved may find themselves able to apply for these loans, though the conservative backing that brought President Trump into office may not approve of risky investments that bring back memories of the sub-prime mortgage market. If the approach remains the same, with a business-as-usual approach, borderline businesses may need additional documentation of asset worth to qualify for loans.

Beyond any potential changes the new administration may bring, having an equipment appraisal performed on your equipment provides a number of other benefits. It helps provide documentation of equipment values for insurance, financial, legal and tax agency circles, when performed by a certified equipment appraiser. Because the certification process teaches the proper methodologies to use in particular situations, which have been tested over time, the appraisal reports produced by such an appraiser stand up to strong scrutiny. This report could serve as documentation of value to help secure an SBA loan by proving the assets you can already bring to bear for your company. It also helps you back up insurance claims, fight bad property tax assessments or prove asset value from a charitable donation.

Regardless of what changes may be coming to the Small Business Administration with the new administration, equipment appraisals for SBA loan purposes are always a good idea. An equipment appraisal report gives you concrete proof of value for your machinery that will stand up in legal, insurance, tax and financial circles.

Tags: appraisal, Trump, sba loan

Estate Taxes: Knowing How to Approach Equipment Value Protects Your Legacy

Posted by Equipment Appraisal Services on Tue, Sep 20, 2016 @ 11:00 AM

estate_taxes_machinery_equipment.jpg

You've spent years building up your business. You've invested wisely, accounted for possible risks and taken the time to build your business into what it is today. You've even groomed the next generation to take over your legacy when the time comes. But have you accounted for gift or estate taxes in your planning? With the high cost of these taxes, failing to plan for them in your estate planning can leave your legacy open to risk. Here's how you can avoid this pitfall through proper, certified equipment appraisals:

Estate Taxes: Knowing How to Approach Equipment Value Protects Your Legacy

Documenting Machine Values

Whether you're planning on passing on a business or just have some good equipment, documenting your equipment values through a machinery valuation can meet several needs at once. It can help prevent fighting by those left behind, with the impression that one family member, partner or friend is getting more than another. If your estate is being divided up between a certain number of people, with equipment left to one and cash to another, it helps determine how much cash the equipment is worth. If you're planning on using a living trust, it also has the advantage of keeping your loved ones out of probate and keeps your accounting and wealth private.

Making Arrangements for Estate and Gift Taxes

Estate and gift taxes can be very heavy, especially if you're passing a large business on to the next generation. By having a current machine valuation performed, you can determine a more accurate picture of what your business assets and equity actually are. When you do this, you can then estimate how much these burdensome taxes may be and make allowances for them either in your life insurance, your business insurance or by leaving a certain amount of equity available to cover these needs. If you are planning on making allowances for these items, you'll want to account for what estate taxes may remove from these funding sources as well.

What Kind of Machinery Valuation?

If you're thinking of simply looking for similar equipment online or finding someone who sells used equipment to give you a general estimate of your machinery's value, we would strongly encourage you to avoid this approach. We've had to try to help families who have suffered a loss whose loved one has gone this route, just to discover that the machinery valuation that was provided was completely inaccurate, whether it's because they need to sell the equipment quickly to pay estate taxes, because the machinery will require extensive work and expense to remove or because the individual who prepared the estimate didn't really understand what they were looking at. Using a certified equipment appraiser helps ensure that the values you're working from are accurate, because the appraiser is required to work within a particular set of constraints and specific methodologies that are approved and often used in probate court. 

By keeping an eye on your equipment values and knowing what to expect in terms of estate taxes, you can rest assured that your legacy will be passed to the next generation as you intended.

Tags: appraisal, estate taxes, estate planning

Automotive Shop Equipment Appraisal: Common Types of Machinery

Posted by Equipment Appraisal Services on Tue, Aug 02, 2016 @ 11:30 AM

automotive_equipment_appraisal-1.jpg

When you have an auto shop, you know the kind of machinery you're using on a regular basis. But are you familiar with other types of machinery that is outside of your area of expertise? Are there machines that could make your job easier and your shop more efficient? In this guide, we'll cover a variety of machinery that we commonly see in automotive equipment appraisal practice.

Automotive Equipment Appraisal: Common Types of Machinery 

Lifts

Lifts help you move the vehicle you're servicing overhead for easier access.

  • Two-Post Lifts: The industry standard, two-post lifts typically have a pair of horizontal posts that come out of each vertical post, allowing the vehicle to be supported in the optimal position and leaving the wheel, suspension and brake systems easily accessible.
  • Four-Post Lifts: For jobs where you want a little more security and stability, a four-post lift is essentially a pair of extended ramps the vehicle is driven onto, which are then hoisted on the four corner posts. Though great for accessing the bottom of the vehicle, they don't work tire, brake and suspension work.
  • Scissors Lifts: If you have headroom issues in your shop, scissors lifts give you additional under-vehicle clearance without taking the vehicle very far off the ground. The scissors action can create moving pinch points, so it's important to be aware of this issue.

Tire and Alignment Machines

  • Tire Changers: Either sold separately or as part of a combination machine with a wheel balancer, tire changers are essential for fast tire changes, allowing the tire to be quickly removed from and remounted on the rim.
  • Wheel Balancers: A tire balancer, either as a solo machine or as part of a combination, is another shop necessity if you deal with tires on a regular basis. They provide fast feedback as to where and to what extent weights are needed to balance the wheel.
  • Alignment Machines: Often an expensive proposition, an alignment machine allows you to fine tune a vehicle's alignment. The vehicle is placed on the machine and the difference between the tires and the steering wheel help provide instant feedback for adjusting the alignment.

Auto Body Equipment

  • Frame Machines: If you're into body repair, frame machines are vital to getting someone's wreck back on the road again quickly and safely.
  • Paint Booths: To help contain the spread of paint and your workers' lungs from solvents, a paint booth helps control the environment around the car being painted, ensuring good results.

Other Auto Shop Machinery

  • Air Compressors: Whether it's impact wrenches or ratchets, pneumatic tools are vital to your shop's productivity.
  • Hoists: If you do serious engine or transmission work, being able to move these heavy, bulky parts around your shop is a definite necessity, allowing your employees the best access to these high-dollar components.
  • Diagnostic Equipment: With the strong use of computers in today's vehicles, having a solid array of diagnostic equipment is necessary to your shop's success and efficiency.

Now that you know the different types of equipment available, you can consider whether that equipment would be a benefit for your shop. If you are considering investing in new shop machinery, have you had an automotive equipment appraisal performed to help you prove your assets and gain good financing for your new purchase? Contact a certified equipment appraiser to help determine your equipment values.

Tags: appraisal, automotive equipment appraisal

What are standards of value in equipment appraisal?

Posted by Equipment Appraisal Services on Wed, Feb 03, 2016 @ 10:30 AM

standards_of_value

One of the key concepts used in equipment appraisal is that of standards of value. Though that term is often bandied about, what does it actually mean? In this piece, we'll investigate what standards of value are, how it affects your equipment's value and what types of standard is used based on your end goals.

How standards of value affect your equipment appraisal

What are standards of value?

Standards of value is a term that can be somewhat confusing, as it refers to two different concepts. One is the machinery valuation in a particular currency or medium of exchange, which can be of vital importance on the international market. But it can also refer to the type of valuation that is performed by a qualified equipment appraiser on your machinery. For the purposes of this article, we'll discuss the second standards of value referring to the value of a piece of business equipment that needs to be appraised and how the different values can affect your bottom line. Depending on your end purpose for the equipment in question, you may need a significantly different valuation method used, so it's of vital importance that you discuss your intentions with the equipment appraiser before the machine appraisal process is started.

How do different standards affect your equipment appraisal value?

Businesses have many different reasons for having an equipment appraisal performed for their company. They may be trying to determine when it becomes more cost-effective to sell off older machinery that is no longer keeping up with demand. They could be determining the salvage value on older equipment to determine whether it makes better economical sense to continue repairing older equipment or to replace it, and how much the salvage of the older equipment may offset the cost of the replacement equipment. They may need to know the replacement value in case of a fire or other disaster for insurance purposes. 

What standard is best for your purposes?

Unless you're considering a forced asset sale due to financial difficulties, most standards of value are used for a few specific purposes. The first is to get a more accurate financial picture for the business by updating the actual value of equipment that has been completely depreciated, whether it's because you're considering a merger, buy out,  sale of the business or other ownership change. The second is to prove the value of machinery in case of a loss, so that insurance claims can be filed in a timely manner, ensuring your company is able to recover from the los and continue operations effectively and with minimal down time. The third scenario involves expanding or reinventing the business' direction, with the appraised equipment standing as collateral for a potential financial loan to make the expansion or change more feasible. Of course, any of these types of standards will also provide you with a better view of your business' financial health, making it much easier to make smart investment decisions.

By keeping these different standards in mind, you can have a machine appraisal completed that is in line with where your intentions lay. At Equipment Appraisal Services, our valuation specialists are certified through the American Society of Appraiser's Machinery & Technical Specialties designation, so they deal only with heavy equipment on a regular basis. This helps our appraisers give you the most accurate equipment appraisals in the industry. Please contact us today to discover exactly what your equipment values are and to get a better picture of your business' bottom line.

Tags: standards of value, appraisal