Plant and machinery valuation
Making sure that the business is operating smoothly, you would need capital to invest more items or incur services that would vastly expand the company. Most often than not, the bank is one common institution where loans from these companies are being made. Banks generally grant loans with collaterals. Since loans from companies usually entail a large sum of money, tangible assets like plant and machinery are often exchanged as collaterals thereby the need for thorough plant and machinery valuation.
Valuing the plant and machinery of an industry is extremely challenging. You would need tremendous help from a trusted plant and machinery valuer that fully understands the business you are running. They are highly dependable when it comes to the types of machinery you have and how to value these assets.
Borrowing money from banks can sometimes be complicated and lengthy. To help in expediting the evaluation, consider the following guidelines:
- Since the bank will generally ask for a list of the company’s assets, The Company should have an updated depreciation schedule of these assets. A useful tip would be to set-up an excel spreadsheet where information about the machinery and other assets are fully recorded. The useful items to be considered in the spreadsheet should be the machinery description, manufacturer, model, serial number, the date of purchase, and the cost.
- Based on the list found in your record, the bank will have a clearer picture on which assets should be separately certified. Other smaller items, depending on their usage and cost, will have to be regarded as bulk and evaluated using the current depreciation standards.
- If a schedule is being asked by the appraiser, the company may choose for a time that is most desirable. This may be a time where there are no employees so that there won’t be any disruption from work.
- When evaluators go the site, make sure that they are accompanied by company staff that has full knowledge and skill on how the subjected items work. Furthermore, be ready with a record of maintenance of these items as they will be thoroughly checked by the appraiser. The appraiser will not only look at the item. He does the examining, documenting and taking of photographs of all the items.
- Going on the site is only one phase of what the business valuers would do. More of their work will be done in the office doing the necessary comparisons with other models and discussions with manufacturers.
The needed appraisal report
The needed appraisal report for the pending bank loan should only be done through the analysis of a qualified plant and machinery appraiser. His evaluation form plays a big part in the granting of the loan. So, when thinking about getting a loan from the bank, make sure to put in mind the tasks that the appraisers will do to give you a better plant and machinery valuation.
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