What the report is allowed to assume
OLV assumes a seller who can wait long enough to find users and dealers, not a sheriff’s sale. Many reports describe that window as roughly six to twelve months. The written definition in the engagement letter controls. Do not borrow a neighbor’s oral version.
The machine list is evidence: make, model, year, control, serial, hours, owned versus leased, lien, last rebuild. The list is not the number. A serialized 2014 VF-4SS without an appraisal is still a row.
Why OLV shows up on healthy files
ABL and some cash-flow lenders want a number they can sell. Federal Reserve G.17’s 76.0% manufacturing utilization print describes how busy the nation’s plants were, not what a used VMC brings next spring (Source: Federal Reserve G.17). Utilization can be high and OLV can still sit well below continued-use FMV on the same iron.
If OLV plus net working capital exceeds earnings value, the floor of the deal is an asset story. That fork lives on asset value versus earnings value, not on this definition.
| Standard | Clock | Typical user |
|---|---|---|
| FMV in continued use | Going concern | Strategic and many searchers |
| Orderly liquidation value | Marketed sale of assets | Lenders, ABL, floor tests |
| Forced liquidation value | Auction / short clock | Distressed files |
Who is allowed to sign the opinion?
A credentialed machinery-and-equipment appraiser. National wage prints — machinist $58,750 in the May 2025 OEWS — do not substitute for that signature (Source: BLS). Neither does a broker opinion of value on the whole company.
Census CBP 2023’s 284,452 establishments are why most files have mixed ages of iron rather than a single campus standard (Source: Census CBP). Mixed ages are why you order the report instead of averaging auction flyers.
What this definition will not publish
Asking prices for a named control or a year-model. Useful-life notes without a sourced comp. A state multiple on the business because the iron is “late model.” Educational information only.
How OLV should be used in a letter
If the buyer’s lender needs OLV, order it early and say which list the appraiser will see. Leased machines and customer-owned cells should be flagged so they do not puff the opinion. If earnings value clears OLV plus NWC by a wide margin, say the floor is not the story. If it does not, the deal is an asset story and the multiple talk should stop.
Do not average OLV and continued-use FMV. Do not call a broker’s desktop a standard. The estimator teaches the difference. It does not sign. The glossary splits OLV from FMV and FLV on purpose. The FAQ holds the question form. When the list is real, book a confidential intro call.
What the engagement letter should freeze
Premise, effective date, whether installation stays, whether software licenses on the controls are included, and whether the appraiser will inspect in person. Desktop opinions on a mixed-age list are how people get surprised by a missing rotary table. Lenders who asked for OLV will not accept a continued-use number with the letters changed. Order the standard they named.
Controls that need a paid software license, customer-owned fixtures parked next to your VMC, and leased machines with a dollar buyout still on the contract all confuse a rushed list. Flag them before the appraiser walks. OLV on a machine you cannot sell is a number the credit memo will remove after you have already argued about it. A CIM should say “OLV to be ordered to the lender’s standard” rather than publish a flyer total. Bring the serialized list with leased and customer-owned flags. Machinery and equipment appraisals compares the three premises. After the list is real, a confidential intro call is the conversion path.
What OLV is not
It is not continued-use FMV. It is not forced liquidation. It is not a flyer total. It is not a broker desktop. The estimator teaches the difference. It does not sign. Lenders who asked for OLV will not accept a continued-use number with the letters changed.
How it shows up: a credentialed, marketed-asset opinion with a written clock, ordered to the standard the lender named. Flag leased machines and customer-owned cells so they do not puff the opinion. If earnings value clears OLV plus NWC by a wide margin, say the floor is not the story. If it does not, stop the multiple talk. Do not average OLV and continued-use FMV. BLS May 2025 machinist median pay of $58,750 is a labor backdrop, not an equipment conclusion (Source: BLS).