SBA Machinery & Equipment Appraisals

The U.S. Small Business Administration (SBA) was established so that more businesses would be created, maintain success, and grow and prosper in the United States.  One of the main duties of the SBA is to assist small businesses with financing. Businesses must have sufficient collateral in order to qualify for an SBA loan. According to the standard operating procedures set forth by the SBA an equipment appraisal is often required to be performed by an independent certified appraiser — especially for 7(a) loans since this type of loan program is used for varying purposes such as debt refinancing, funding working capital, equipment purchases and leasehold improvements, to name a few. No matter what the reason for a business loan, a qualified SBA equipment appraisal is an important part of the process, especially since not all equipment appraisals are accepted by the SBA. Appraisals that are not USPAP compliant and not certified are not accepted by the SBA since there are no regulations to guarantee that an uncertified equipment appraisal is fair and unbiased. An equipment appraisal that does not meet SBA qualifications could potentially be lacking in supporting documentation needed by the company and the lender. If this were to happen, than legal action could be the result — especially if the company were to default on the loan. This is why it is important to get a qualified SBA equipment appraisal that is certified and USPAP compliant.