Glossary · Reading the business
Equipment Appraisal
In short
A professional valuation of a business's machinery and equipment. It determines the fair market value and liquidation value of these assets, which are often pledged as collateral.
What it means in a deal
For deals with substantial equipment, your lender will require an equipment appraisal to determine its value as collateral for the loan. This appraisal will often provide both fair market value and orderly liquidation value. Scrutinize this report to ensure the equipment is in good condition and its valuation aligns with your expectations, as it secures a portion of your loan.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Equipment Appraisal
- Is an independent appraisal always required when an acquisition includes significant goodwill?
- When is an independent appraisal required for non-real estate business assets being acquired?
- Does the SBA require an independent business appraisal for a business acquisition costing $400,000?
- Can an SBA 7(a) loan cover the cost of a business valuation or appraisal?
- When is a business appraisal required for a change of ownership transaction exceeding $500,000?
- When is a separate goodwill appraisal necessary for a business acquisition loan exceeding $1,000,000?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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