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Small Business Association and Financing

June 12, 2013

Small businesses are one of the driving forces behind the U.S. economy. Every year, thousands of new businesses open their doors and provide jobs, local wares, and an alternative to big-box stores to local towns. Though not every new business is a success story, the ones that are serve as an inspiration to those who are considering opening their own small business.

Small business communities tend to be tightly knit. Most owners belong to networking groups and local chambers of commerce, both of which supply information, advice, and camaraderie to like-minded people. But where do small business owners and potential small business owners turn when they need an infusion of capital for start-up or expansion? One place is the U.S. Small Business Association (SBA).

While it’s true that the SBA arranges financing for small businesses, most often adequate collateral is required to qualify for a loan. And to satisfy SBA collateral requirements, a certified equipment appraisal report conducted by a qualified appraiser is often necessary.

Whether the loan is for expansion of the business or to cover payroll until a revenue stream is established, a certified equipment appraisal report is vital. Not only will it satisfy the bank, but it will help in making important business decisions such as accounting depreciation and asset replacement.

Not all equipment appraisals are acceptable. The Uniform Standards of Professional Appraisal Practice (USPAP) exist to create a uniform valuation approach. In addition, USPAP outlines ethical and reporting requirements. A non-USPAP compliant report might not provide necessary information for the company and lender, which could lead to legal issues if a company defaults on the loan.

If you’re a small business owner and are considering an SBA-arranged loan, be sure to have a proper appraisal performed on all of your assets beforehand. In the world of small businesses, it can be the difference between success and failure.

The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage.

By: NEBB Institute


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