When applying for equipment finances, it’s important to ensure you and your broker understand the total value assigned to the equipment you wish to obtain. In doing this, you ensure that your broker can arrange the right credit application for you as well as help you with future business taxing and auditing.
Many larger assets require professional valuation, which will make sure that everything, from cash flow through to market securities, is considered when determining the final value. There are a number of valuation techniques that an asset will undergo to produce its final value, including absolute value models, relative models and options pricing models. Each model has been created to give your asset the best possible valuation.
How does asset valuation help businesses?
The main reason to work with a valuer is to ensure that the right price is paid by the client or individual. This is one of the base reasons for valuation, but the benefits include much more than this. Valuation of equipment helps businesses in more than one way:
Taxes: Accurate calculation of tax dues can only be done if the value of assets are given properly.
Earning and investment potential: Large assets will be valued based on their future earning potential, so professional valuation gives businesses a chance to determine how their equipment can help their cash flow.
Financial audits: Large businesses are expected to practice reporting and financial audits, and valuation of large equipment can help auditors determine the worth of a company from the valuation of its assets.
Collateral: Applying for loans requires collateral, and assets such as equipment can typically be used for this purpose. The bank will grant you a loan based on the security you offer, and properly valued equipment can provide them with it.
How does valuation tie in with your broker?
The use of a proper valuer will help provide applications with some credibility provided it’s done before an analyst asks for it. Miscalculated valuation can lead to the application and approval process slowing down, for brokers and clients. This means more time spent getting your equipment and less time using it. Finance brokers aim to guide you through the best possible decision for your specific business requirements, so getting a professional valuer in long before the analyst requests it can save both of you time.
If your business is looking to finance equipment for further company growth, speak to the team at Atlas Equipment Finance today. We offer customised guidance to all of our clients, helping them choose the best financing options for their needs. For more information of asset valuation and financing, call us on 1300 731 131.