Investor · Miami, FL · Member since 2014 · 47 posts · 5 votes
Hi Everyone!
Could you please tell me how I would value a business for a personal financial statement that I would be submitting to a bank for a commercial property loan?
I own a photography studio. I lease the space in a shopping strip plaza. All the equipment in the business I own free and clear. Common sense tells me to add up the value of the equipment. But what figure should I use? Purchase price, cost of replacement, or what its worth now - used?
What about goodwill or the income or potential income in the years to come?
This is my job full-time. Not only do I get a w-2, I also get a K-1 at years end.
I would ask my CPA but I don't have one. And I doubt that I could find one to see me this weekend. (I'm submitting my financial statement on Monday).
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
11y
Call a business broker @Diem Tran and see if he would bother listing it and how it is appraised. Different types of businesses are valued primarily on a multiple of the annual income with consideration for the property involved. As far as the bank caring about the value; don't think it will play any role. The banks are looking for sustainable income with a history of income. Commercial lenders will want a sizable down and have tougher terms than you might be used to. Some commercial lenders will want to see a net worth equal to the loan amount.