Get Written Estimates
Obtain independent appraisals or estimates of the value of any large ticket items in your business plan.
Lenders will always view your self-appraisals with a jaundiced eye; it is far more credible to include a written appraisal or estimate from a third party, such as a professional appraiser or some other highly credible firm.
A number of situations might benefit by including an appraisal or estimate, such as:
- Real estate (the most common example).
- When seeking a loan to purchase equipment; it will strengthen your case to include a written estimate from someone known for his or her knowledge about the item.
- When you aspire to use tools or equipment that you already owned as owner’s equity or security on a sought-after loan.
Action
If you have set up a working copy of your business plan using the Shell™, this information will be entered included in your business plan as an appendix. It will be included under Section 6 Appendices “Appraisals.”
- Review your assets, capital purchases, and any items you are offering to provide for security.
- Determine whether the value of any of the items will be questioned by the lenders or potential investors.
- Select a credible professional and have them do the appraisal, valuation, or assessment.
- Include the appropriate appraisal documentation in the Appendix.