Asset valuations for lending decisions

Lenders typically require two figures from an asset valuation report, and understanding the difference between them matters.

Market value is the estimated amount an asset would achieve in an arm's length transaction between a willing buyer and seller, with adequate time to market the asset properly. Lenders use this to understand what the asset is worth under normal conditions.

Forced sale value, sometimes called orderly liquidation value, is the estimated amount the asset would achieve if it had to be sold within a constrained timeframe, such as after a borrower default. This figure is typically lower than market value and is the one most lenders use to determine their maximum advance. The gap between the two figures varies by asset type and sector.

Our reports can include market value, forced sale value, or both, depending on what the lender requires. We will determine which one you need during your initial consultation.

How do asset valuations impact lending decisions?

Asset-based lenders use valuations to determine the maximum loan amount they can offer against equipment, machinery, vehicles, or stock. An accurate, independently prepared report gives lenders confidence in their security position and demonstrates the quality and condition of the assets being offered as collateral.

A well-prepared report can lead to more favourable borrowing terms, higher advance rates, and faster approval processes. An inaccurate or inadequately prepared one can result in a reduced facility, delays, or a lender declining the application altogether.

• Support loan applications – Lenders require independent valuations to justify advance rates and approve facilities. A professionally prepared report removes a common source of delay in the approval process.
• Maximise borrowing potential – Accurate valuations ensure the borrower receives the maximum finance the assets can support. Undervalued assets mean a reduced facility.
• Provide confidence to all parties – An independent assessment prepared by a named, qualified valuer gives lenders, borrowers, and brokers certainty in the figures being relied upon.
• Prepared to the standard lenders expect – Our reports are prepared by Richard Temple MRICS, a Registered Valuer, and include market value and forced sale assessments in the format most lenders require.
• Support portfolio reviews and covenant monitoring – Lenders with existing facilities often require periodic revaluations to monitor their security position. We provide these alongside initial lending valuations.

How do I arrange an asset valuation for lending decisions?

Call 0333 200 2041, email [email protected], or complete the form at the bottom of this page. We will discuss your requirements and confirm the valuation bases your lender requires.

An expert will then visits your premises to carry out an on-site inspection. Each asset will be assessed individually, have its condition and specification recorded, and get photographed for the report.

The resulting valuation report sets out each asset with a description, condition note, photograph, and assessed value on the agreed basis. Market value and forced sale value are both included where required. The report is prepared to the professional standard that asset-based lenders expect.

This valuation service does not constitute a lending or credit decision. Borrowers and lenders should take independent financial or legal advice before entering into any finance arrangement.