Collateral Appraisal
Jewelry that is tendered in place of cash for payment purposes is a form of collateral and accordingly the loaner may require an appraisal. Bank loan officers frequently ask for this type of appraisal when they want to determine the cash value that they can reasonably expect to receive, in the event the loan is forfeited upon liquidation of the jewelry or gemstones. Collateral appraisals provide the fair market value of the items; however, banks need to know their options for quick disposition of the property, so you may wish to included a liquidation value as well. Your appraisal should cover a full range of disposal options for the bank.