Financing
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Asset Valuation

for Asset-Based Lending

Effectively leveraging assets to raise capital requires an accurate appraisal, and AccuVal serves every major asset-based lender in the world. Every year, corporations across the globe rely on AccuVal’s asset valuations to secure tens of billions of dollars of funding from a wide variety of capital sources. We appraise businesses and all business assets, including intangibles and intellectual property, machinery, inventory, real estate, and accounts receivable. AccuVal’s asset valuations help support numerous types of financing, including:

  • Machinery and equipment term loans
  • Inventory revolving credit facilities
  • Real estate financing
  • Cash flow mezzanine financing
  • Intellectual property mezzanine financing
  • Debtor-in-possession financing
  • Small Business Administration (SBA) lending
  • Lease residuals and useful life analyses
  • Accounts receivable financing
Learn more...

What is asset-based lending?
Asset-based lending is a financing solution for companies that are unable to obtain or are restricted by traditional bank financing options.  The additional capital raised can serve as an immediate infusion of working capital, to fund a new acquisition or to purchase new equipment, among other purposes.

Why do my assets need to be appraised to get a loan?
These types of loans are always secured by a group of assets, which may include machinery, inventory, real estate, accounts receivable and intangible property or a combination of the above.  When evaluating a loan of this type, financial institutions perform in-depth due diligence to understand the strength of the company, its ability to repay the loan and the valuation of assets securitizing it.  This is where AccuVal comes in.  The two most commonly requested asset valuation definitions used by asset-based lenders, as defined by the American Society of Appraisers, are:

Forced Liquidation Value — the estimated gross amount, expressed in terms of money, that could typically be realized from a properly advertised and conducted public auction,with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis as of a specific date. 

Orderly Liquidation Value — the estimated gross amount, expressed in terms of money, that could be typically realized from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.

In addition, asset-based lenders will frequently request that  asset valuations include an estimate of the cost to conduct an auction or liquidation sale, thus indicating the net realizable value after sale expense and sometimes after considering other holding costs, too.

How are asset valuations conducted?
AccuVal helps lenders and borrowers to understand the valuation of assets collateralizing the loan by examining various scenarios for liquidating the assets in the event of loan default.  Depending upon the industry and nature of the assets, AccuVal recommends the most appropriate and likely liquidation scenario to serve as the basis for underwriting the loan.  There are three generally accepted approaches used in asset valuations, but not all of these approaches are applicable when valuing certain assets for asset-based lending purposes:

Market (sales) comparison approach to asset valuation – Actual market transactions of similar assets are compared to the subject asset and adjusted for variations that would likely affect price.

Cost approach to asset valuation – The present cost of replacing the asset(s) is derived, less all accrued depreciation.

Income approach to asset valuation – Future income streams from the asset are capitalized and discounted to a Net Present Value (NPV).

AccuVal is a pioneer in the leveraged finance industry and tens of thousands of asset-based loans have been backed by our asset valuations.  Our team is experienced at uncovering hidden value in untraditional places and recommends asset bundling strategies that maximize the borrowing power of companies.  AccuVal’s appraisals reflect current market conditions and model real-world liquidation scenarios.  In the event of loan default, our sister company, LiquiTec can be engaged to execute a sale of the secured assets.

 

  • Trigger Events
  • Related Services
  • Get Started
  • You need capital to:
    • accelerate corporate growth
    • acquire another business
    • defend against hostile takeovers
    • finance specific projects
    • purchase or lease new assets
    • pay one-time or extraordinary dividends
    • prepare for or emerge from bankruptcy
    • repurchase shares
    • support management-led buyouts
    • sustain vital operations
  • Your assets have increased in value
  • You need to value additional assets to pledge as collateral
  • Loan covenants require periodic reappraisals
Financial Reporting: Purchase Price Allocation
  • Allocate the purchase price following the completion of a merger or acquisition
Financial Reporting: Impairment Studies
  • Comply with annual financial reporting requirements by testing goodwill and other assets for impairment annually and/or based on certain “trigger events”
Business Need: Mergers and Acquisitions
  • Facilitate a merger or acquisition end-to-end by leveraging valuation, advisory and asset management expertise throughout all phases of the transaction
Business Planning: Crisis Management
  • Strategize ways to endure through economic/market declines that are affecting your industry
Risk Management: Replacement Cost Valuations
  • Establish proper insurance coverage
Tax Management – Property Tax: Valuation for Appeal
  • Attack over-assessments by filing an appeal when the assessed value of real property is higher than your property’s Fair Market Value
Business Planning: Feasibility Analysis
  • Validate the viability of your business plan

View AccuVal’s Appraisal Expertise by Asset Class:

Business Enterprise

Equity & Stock

Bonds

Intangibles & Intellectual Property

Machinery & Equipment

Inventory

Real Estate

Accounts Receivable

The following is needed to determine how AccuVal can help:
  • List of location(s) and address(es) to be appraised along with the type of operations ongoing at each location
  • Copy of offering memorandum, in the case of an acquisition
  • Copies of past appraisals
  • Business enterprise and equity
    • Three years of detailed financial information
    • Copy of current business plan (if available)
    • Background information on intangible assets(s)
  • Intellectual property
    • Background information on intangible assets(s)
  • Machinery
    • Equipment listing
    • List of any recent purchases or retirements
  • Inventory
    • Copy of a perpetual inventory listing
    • Description of the inventory management system(s)
  • Real Estate
    • Acreage associated with the property and any non-contiguous land
    • Description of any special site improvements
    • Copy of a survey or site plan, when available
    • Total floor area (in square feet) at each location
  • Accounts Receivable
    • Copy of the accounts receivable aging report
For more information or to request a proposal
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