Appraisals and Inspections

What are Equipment Appraisals and Inspections? 

Equipment appraisals and inspections are critical tools in equipment finance for understanding, validating, and preserving collateral throughout the lifecycle of a transaction. Appraisals establish a defensible estimate of equipment value based on current market data, asset condition, and intended use. They inform underwriting, residual setting, and end-of-term planning. For lenders and lessors, appraisals provide a quantitative foundation for credit decisions and a mechanism for measuring portfolio exposure relative to asset risk. Inspections focus on the physical verification of equipment condition, usage, and location. They serve as a practical counterpart to appraisals, confirming that the asset exists, its condition, and whether it is being used in accordance with contractual terms. Inspections are commonly performed prior to funding, during mid-term reviews, or as part of asset-management and end-of-lease procedures. As equipment types evolve and economic cycles shift, the need for current, accurate, and independent assessments of equipment value and condition remains constant.  

The Alta Group’s equipment appraisal and inspections services have earned global recognition for delivering accurate estimates of an asset’s value for leasing, financing, portfolio management, and sale. Alta’s appraisal work enhances decision-making and instills confidence across all stakeholders—credit officers, investors, syndication partners and CFOs alike. 

“When a client needs to know the value of their equipment, Alta’s experts have the depth and breadth of industry knowledge and experience to get them there.” – Carl C. Chrappa, Senior Managing Director, Asset Management Practice Leader 

Types of Equipment Appraisals 

Not all appraisals serve the same purpose. The type of appraisal selected should align with the intended use, whether it’s for underwriting, residual setting, portfolio valuation, or asset recovery. Here are some of the most common types of equipment appraisals performed by The Alta Group: 

• Fair Market Value (FMV). Often used in underwriting, lease pricing, end-of-term negotiations, and financial reporting. 
• Orderly Liquidation Value (OLV). Represents the estimated gross amount that could be realized from the sale of assets in a controlled, orderly liquidation sale. Widely used in secured lending, syndications, and when evaluating secondary-market risk. 
• Forced Liquidation Value (FLV). Also known as auction value, FLV estimates the price an asset would fetch when sold under duress. FLV is most often used in workout, repossession, or recovering planning. 
• Replacement Cost New Less Depreciation (RCNLD). Estimates the cost to replace an asset with a new one of comparable utility, then deducts depreciation based on age, condition, and obsolescence. 
• Desktop Appraisals. These are conducted without a physical inspection, based solely on information provided by the client. Desktop appraisals can provide fast, cost-effective estimates for internal decision-making, portfolio reviews, or preliminary due diligence.  
• Litigation Support and Expert Testimony. In legal disputes involving equipment values, contract breaches, shareholder disputes, insurance claims, or bankruptcy proceedings, an experienced appraiser may be called upon to provide formal litigation support. Alta’s appraisers are experienced expert witnesses, and bring not only deep asset knowledge but also the communication skills and documentation discipline necessary for scrutiny under cross-examination. This credibility can influence case outcomes and settlement negotiations. 

Selecting the right appraisal type and the right appraisal partner can significantly impact the success of an equipment finance transaction.  

Key Benefits of Equipment Appraisals and Inspections 

Equipment appraisals and inspections provide the transparency and assurance needed to structure deals confidently, monitor portfolio health, and protect collateral in a dynamic market environment. The benefits to equipment finance firms include: 

• Understanding your equipment collateral value – The Alta Group provides inspections and appraisals to understand items that are leased or financed along with current and prospective values. Our work gives clients a confident understanding of the collateral value of an asset at different points in the business cycle, from origination to bankruptcy proceedings.  

• Improving end-of-lease outcomes – Whether it’s mid-term or end-of-lease, we can provide visual inspection services to determine if the leased or financed equipment meets the maintenance provisions of the financing documents. This work with clients enhances an appraisal by including the actual condition of the equipment rather than the assumed condition.  

• Expert opinions and accurate valuations – When litigation support is necessary, rely on trusted, defensible valuations by Alta advisors who have expert witness experience in both state and federal courts.

Our Approach to Equipment Appraisals and Inspections 

Alta is committed to tailoring services to meet the specific tactical and strategic needs of clients worldwide.

Expert Access 

Under our ExpertAccess Program, we can create a “virtual” asset management department, or we can simply augment your current asset management team with our extensive resources and expert advice.  

The program includes:  

• Opinion letters for current and future value  

• FMV opinion letter (verification)  

• Industry research and data  

• Verbal opinions for bidding purposes  

• Selected additional services are available as required 

The following additional services are available at a discount to program participants:  

• Inspections and appraisals  

• Full USPAP appraisals: complete reports  

• Remarketing/auction services  

• Market studies  

• Expert witness  

• Due diligence support  

Alta’s expertise spans diverse industries, asset types, and valuation purposes while supporting key stakeholders including lenders, lessors, private equity firms, legal teams, and investors. Our services are based on an agile business model and an abiding focus on the future. We help our clients set and act on clear strategies for enduring success, today and tomorrow. 

Equipment Residual Value (RV) Matrix 

Alta’s Equipment RV Matrix provides estimated residual values as a percentage of original cost. The matrix covers hundreds of equipment types for up to a seven-year time horizon, and is particularly useful for small to midsize companies. It can give the client the ability to compete with most equipment leasing and finance companies, as well as support internal asset management and sales operations. 

Equipment Appraisals and Inspections Case Studies 

Expedited inspection for used helicopter 

When an EF company needed immediate inspection and appraisal for financing a used helicopter in Hawaii, Alta immediately dispatched an aircraft inspector who completed log reviews, inspection, and test flight in less than two days. 

Bank-owned leasing firm seeks appraisal for potential portfolio sale 

Alta’s asset management team was brought in by a major bank leasing client to review and appraise a $2.5 billion portfolio. Areas such as rail and aircraft were found to be severely overvalued, prompting the bank to take reserves against these impaired assets. 

Law firms need equipment appraisal to value personal property assets of Big 3 automaker 

Due to a problem with security interest documentation, a consortium of more than 100 law firms sought to engage an appraisal firm for a post-bankruptcy retrospective appraisal. Alta advisors performed sampling onsite inspections and completed a draft appraisal. 

Equipment appraisals and inspections play a critical role in managing equipment portfolios, risk, and collateral value. The Alta Group’s customized advisory services help clients build appraisal and inspection capabilities to improve asset valuation accuracy, optimize lease-end strategies, and support portfolio sales or financing decisions. 

Contact Alta today for tailored equipment appraisal and inspection services, including our ExpertAccess Program.