FMV vs OLV for lenders: which value does the bank want?
For lending, the bank usually wants a liquidation premise, not a retail one. Fair market value (FMV) is the price between a willing buyer and seller, neither under pressure. Orderly liquidation value (OLV) is what the same assets bring in an orderly, time-limited sale, and it is typically lower. Lenders and the SBA lean on OLV, or net orderly liquidation value (NOLV) after the costs of sale, because it reflects what they could recover if they had to sell the collateral. FMV still appears for purchases and accounting. The file, or the program, defines which one you need.
By Jesse Lukes · report writer & audit specialist · June 1, 2026
What fair market value means
Fair market value is the price at which an asset would change hands between a willing buyer and a willing seller, neither compelled to act, both reasonably informed, with adequate time to market. It answers "what is this worth in a normal sale." It is the right premise for a purchase, a sale, financial reporting and many tax and estate matters. It is usually the highest of the common premises, because it assumes an unpressured, fully marketed transaction.
What orderly liquidation value means
Orderly liquidation value is what the assets would bring in a sale conducted over a limited but reasonable period, with the seller compelled to sell, typically through dealers or auction. It assumes time pressure and a wholesale channel, so it generally sits below FMV. Net orderly liquidation value (NOLV) takes OLV and subtracts the costs of selling, such as commissions, removal and fees, leaving the net the lender could expect to recover.
Why lenders prefer a liquidation premise
A lender is not underwriting the best-case sale; it is underwriting the downside. If the borrower defaults, the bank may have to sell the collateral on a timeline it does not control. OLV and NOLV model that scenario, so they are the conservative, recovery-focused numbers a credit desk and the SBA want behind a loan. A retail figure overstates what the bank could actually collect, which is exactly the optimism an examiner is trained to discount.
Which premise should you ask for?
Let the purpose decide, and confirm with the lender or program before the appraisal begins. Lending and SBA collateral files usually call for OLV or NOLV. A purchase, sale or financial-reporting need usually calls for FMV. Some files want more than one premise reported side by side. The same equipment can carry all of these values at once, each correct for its own question. For the full set of premises and how they relate, see our explainer on FMV, OLV, FLV and NOLV.
Common questions
Answers, up front.
Does the bank want FMV or OLV?
Usually a liquidation premise. Lending and SBA collateral files typically call for orderly liquidation value (OLV) or net orderly liquidation value (NOLV), because those reflect what the lender could recover in a compelled, time-limited sale. FMV is more common for a purchase, sale or financial reporting. Confirm the required premise with your lender before the appraisal starts.
Why is OLV lower than fair market value?
Because OLV assumes time pressure and a wholesale channel. The seller is compelled to sell within a limited period, usually through dealers or auction, rather than waiting for the best retail buyer. That conservative scenario produces a lower number than FMV, which assumes an unpressured, fully marketed sale.
What is the difference between OLV and NOLV?
OLV is the gross proceeds from an orderly liquidation. NOLV (net orderly liquidation value) subtracts the costs of selling, such as commissions, removal and fees, to show the net the lender could expect to recover. Lenders often focus on the net figure.