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| I don't know what the bank would say about value but if it was appraised based on replacement/like kind it would be worth more than I paid for it. Machinery values have gone up over the last year. I had a banker (not mine but one I know) tell me that he wouldn't bat an eye at someone upping values 5-10% if it wasn't old junk this year. My assumption is that we can bump value and then lend back most of that.
As for the working capital, the current debt would go from the current 13k (the payment) to the new payment (call it 18,000) but the asset would go from 0 (the equity is not current) to the difference that they would be giving me in cash (your math is 25,000). So current debt is only increasing 5k but current assets go up 25,000. Add 20,000 vs current position. If your numbers are what they come up with I don't think I would do it.
Edit... I guess you caught on to the cash increase just didn't put the numbers to it.
Edited by kst1 9/25/2021 15:34
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Creation of working capital
