We have about 750,000 replacement value in machinery and equipment. That's what it would cost to buy comparable equipment new. How much is that worth as collateral to a bank, and how much do I show on the books as an asset? Please don't tell me to ask my banker or an accountant this question, as there are many variables that they aren't all familiar with.
If I sold them today, they might not even bring $50k at auction. We all see how worthless equipment is today. That's why I'm wondering how to value it on the books and to secure a line of credit.
(Business and Management Forum)
If you don't want to ask the accountant, then your stuff is probably worth $0.30 on the dollar to the bank. If you ask the accountant, he can explain how the banker sees things and help you prepare a financial statement that will ultimately be the basis for the banker's decision. Bankers recognize that depreciation is taken for tax and financial reasons and will typically add back the depreciation taken, less a factor for the age and condition of the equipment. In other words, your equipment may be worth much more than you think as a collateral asset. Then, maybe the stuff is only worth scrap, as you suggest. If you are looking for more than you could get on a credit card, the bank will want an appraisal.
If you have that much equipment, I would think you are pretty good size and would already have a working relationship with a good banker who knows your business.