The value of appraisals – What is a borrower’s collateral worth?
Abstract: Commercial borrowers may pledge equipment, real property, stock and other assets as loan collateral. But the amount shown on a borrower’s balance sheet may not reflect an item’s current market value. This article reviews appraisal techniques and shows how formal appraisals can lead to smarter lending decisions. A sidebar highlights the appraisal provisions mandated under the SBA 7(a) loan program.