Providing Accurate Appraisals for Over 30 years

1. Loan Underwriting and Collateral Valuation

• Secured Lending: When a borrower applies for a loan secured by an asset (e.g., equipment or other valuable property), the bank needs to assess the asset’s market value to determine the loan amount it is willing to offer. The appraisal helps ensure that the asset is sufficient collateral to cover the loan in case of default.
• Loan-to-Value (LTV) Ratio: An accurate appraisal helps calculate the Loan-to-Value ratio, which impacts the terms and approval of the loan. For example, a lower LTV means a lower risk to the bank.

2. Mergers and Acquisitions (M&A)

• Valuation of Acquired Assets: In M&A transactions, appraisals determine the fair market value of assets involved in the deal, such as equipment, inventory, or intellectual property. This helps assess the potential risks and returns associated with the transaction.
• Due Diligence: During the due diligence process, appraisals are used to verify the value of assets on the balance sheet, ensuring that no overstatement of asset values is present.

3. Financial Reporting and Auditing

• Asset Valuation for Balance Sheets: Clients may require periodic appraisals of their own assets for financial reporting and auditing purposes. This includes valuing equipment, inventory, investments, or other tangible assets to comply with regulatory requirements and accurately reflect their current value on the balance sheet.
• Impairment Testing: If an asset’s value decreases significantly, you may need an appraisal to assess whether an impairment has occurred, which could affect financial statements.

4. Risk Management

• Stress Testing: Appraisals can be used to assess the impact of adverse market conditions on the value of assets.
• Credit Risk Management: Asset appraisals help evaluate the creditworthiness of borrowers by determining whether the collateral they provide is sufficient to mitigate risk in case of default.

5. Foreclosures and Loan Recovery

• Asset Sale in Default Situations: In case of a loan default, appraisals are needed on the foreclosed assets (e.g., equipment, inventory, vehicles) to determine the sale price and recover as much of the loan amount as possible.
• Auction or Sale of Collateral: The appraised value provides an estimate of what creditors can expect to recover through the sale of the collateral, guiding decisions about how to proceed with liquidation.

6. Tax and Estate Planning

• Estate or Trust Valuations: Trustees or estate administrators may need appraisals for estate planning or probate purposes. These appraisals determine the fair market value of assets to establish tax liabilities or distribute assets to beneficiaries.
• Tax Assessments: Appraisals are also used for determining property tax liabilities.

7. Insurance Purposes

• Coverage Validation: Creditors often require appraisals for assets that are being insured (such as inventory or equipment) to ensure they are properly covered in the event of loss or damage. This also helps in verifying that insurance coverage is adequate.

8. Strategic Decision Making

• Divestiture or Downsizing: If a business is considering selling non-core assets, an appraisal provides a clear understanding of the value of those assets, which is critical for making strategic decisions on whether and when to sell.
• Internal Capital Allocation: Businesses may use asset appraisals for allocating internal capital to different business units or evaluating the performance of subsidiaries and investments.

In all these cases, asset appraisals provide you with reliable, objective valuations that support sound decision-making, risk management, and regulatory compliance.