A Certified Equipment Appraisal for Business Purchase

Get a Certified Appraisal Before Buying a Business in MichiganWe’ve talked a lot about how equipment appraisals help a business owner that is selling their business. But we haven’t discussed the benefits that requesting certified equipment appraisals can have for the buyer of a business. If you are a Michigan business owner, or are hoping to become a business owner, you would be well served to request an independent equipment appraisal before purchasing a new business. These are our thoughts on the importance of an equipment appraisal before purchasing a business.

Know Exactly What You’re Getting

An individual that is selling their business, especially if they are in a hurry to sell, may include in the sale price pieces of equipment that may not be working or have significant issues. It is in your benefit as the potential buyer of a business to know exactly what you are buying. You may not be able to adjust the price of the purchase with this information, but you will know what equipment you may need to invest in, in the future. A certified equipment appraisal will give you substantial information on the quality of the equipment that you are receiving as part of your purchase. If you find that there are too many pieces of equipment that have problems, you may want to consider walking away from the purchase or demanding a lower purchase price.

Have an Accurate Business Valuation

An important piece of information for an individual that is looking to purchase a business, is the business valuation. This number takes into account the property the business owns, the product on hand, anticipated profits, liabilities and assists, among other details. You will be provided a business valuation as part of the purchase process. However, there are different, yet acceptable ways of determining equipment value, which can significantly alter the business valuation, and in some cases the purchase price. It is important to know exact equipment value and expected life as they relate to the business valuation before you agree to purchase. This could potentially save you significant amounts of money.

Support Your Loan Request

We have discussed this frequently, but it is so much easier to get a loan with competitive rates when you have an accurate price and value of the business you are thinking about purchasing. Your banker will feel secure in loaning you the funds for your business purchase knowing that you have quality and reliable equipment and won’t soon be returning asking for another loan to purchase replacement equipment. This helpful information can also support collateral that you may have been asked to provide for the loan and the purchase.

The Right Insurance

Prior to closing your purchase, you may be asked to provide proof that insurance for your new business has been arranged. Your insurance provider will likely want to have a listing and value for all equipment that will be purchased with the business, so that they can provide the right insurance with the right coverage for all of your equipment and buildings.

I Am Considering Buying a Business in Michigan and Need a Certified Equipment Appraisal!

You know that it is important to have quality, certified equipment appraisals when you are selling your business. However, you may not consider the importance of a certified equipment appraisal for a potential business purchase. Protecting your pocketbook and future investment is a great reason to request an independent, certified appraisal of equipment you will be buying. R. Stout Appraisals can help you support your business purchase by providing a quality, certified appraisal for all equipment in a potential purchase. To schedule an equipment appraisal before you buy a business in Michigan or to learn more about our appraisal business, call us today at (248) 978-8338.