Value of Equipment

How do I go about setting a value for my equipment?

I am writting a new business plan and want to use my equipment as some of the collatoral.

Do I use the price I paid for it? Or Do I us the price that someone else would pay for if I was selling it now?

Does anyone know what the bank is looking for?

Depreciate it over 29 years. (From new)

29 years seems like a long time, Isn’t the standard 7 years?

We have done many appraisals. Equipment 10 years or less we value at 50% of cost. Older but operating from 50 down to 30 depending on age. From 30% down depends on condition.

Banks are interested in possible liquidation value, what they could sell the equipment for if you go broke, not value to you nor replacement value.
George Mills

A good person to contact and ask is Mike Rasmussen (mikejrasmussen@msn.com). He writes for PMQ and is a CPA who specializes in the restaurant industry.

Our banks have given us about ZERO collateral value for outr used equipment. I wish you better luck than we have had in getting loan value against used equipment.

another option to consider…talking to a “leasing” company & “re-lease” your current equipment…an expensive method to raise cash, but doable if the bank won’t play…