Orderly liquidation appraisal

Definition

A valuation of used equipment at what it would fetch in an unhurried sale.

Why It Matters

It is the difference between a lender counting half your equipment and counting eighty percent of it, which on a fleet or a shop full of machines is the difference between fully secured and a shortfall the guaranty has to cover. Without one the program values used equipment at half of net book value; with one it may go to eighty percent. So it is worth commissioning before the file goes up instead of after a collateral gap appears, and the cost of the appraisal is small against the equity it can save.

In numbers: A fleet carried at $800k of net book value counts as $400k of collateral unappraised, and up to $640k with an orderly liquidation appraisal, which is $240k less of a shortfall for the guaranty to carry.