What is Net Orderly Liquidation Value (NOLV)?
Net Orderly Liquidation Value is Orderly Liquidation Value minus the costs of selling the equipment. It is the net cash a lender could reasonably expect to have in hand after an orderly, time-limited sale, once commissions, removal, freight and the rest of the sale expenses come out. That is why asset-based lenders build borrowing bases on NOLV rather than on a retail figure, and why the deductions matter as much as the gross number. Lukes & Lukes is an independent machinery and equipment appraisal firm, and NOLV is one of the premises we report for lenders nationwide.
By Jesse Lukes · report writer & audit specialist · August 13, 2026 · Reviewed by Jared Lukes
What does NOLV actually mean?
NOLV starts with Orderly Liquidation Value, the gross proceeds the equipment would bring in a sale conducted over a limited but reasonable period, with the seller compelled to sell and the assets moving through dealers or auction rather than waiting for the best retail buyer. NOLV then subtracts what it costs to run that sale. The result is a net figure, not a gross one.
The distinction sounds academic until you look at heavy or installed assets. A press that brings a respectable gross number at auction can carry rigging, disconnection and freight costs that consume a meaningful share of the proceeds. The gross figure says what the market pays. The net figure says what the lender collects. Only one of those pays down a loan.
What comes out between OLV and NOLV?
The deductions vary by asset, by site and by how the sale is run, which is why they belong in an appraisal rather than in a rule of thumb. The categories a lender should expect to see addressed:
- Sale commissions and auctioneer fees: what the selling agent takes off the top
- Removal, rigging and disconnection: getting the asset out of the building without damaging it or the building
- Freight and transport: moving equipment to the buyer or to a sale site
- Site restoration: capping utilities, patching floors and leaving a leased space in the condition the lease requires
- Marketing and cataloging: photographing, listing and advertising the assets to a real buyer pool
- Storage, insurance and security during the sale period, when the assets still have to be kept somewhere
An appraisal that reports NOLV without showing how it got there is asking the credit desk to take the number on faith. The support should be traceable asset by asset, or at minimum category by category, with the assumptions stated.
Why asset-based lenders run on NOLV
An asset-based lender is underwriting recovery, not performance. The advance rate on an equipment line is commonly expressed as a percentage of NOLV because NOLV already models the bad day: the borrower is gone, the sale is on someone else's timeline, and the costs of getting the equipment sold come out of the proceeds before anything reaches the bank. Advancing against a gross or retail figure builds an optimism into the borrowing base that the collateral cannot support.
The same logic is what makes NOLV a recurring number rather than a one-time one. Borrowing bases get redetermined, and equipment values move with the used market, with utilization and with condition. Lenders in an ongoing relationship often update the valuation at renewal or annual review so the advance rate is still resting on something current.
How NOLV compares to the other premises
Fair Market Value assumes a willing buyer and a willing seller with adequate time and no compulsion, so it is generally the highest of the common premises. OLV assumes compulsion and a limited sale period, so it sits below FMV. NOLV takes OLV down further by the costs of sale. Forced Liquidation Value assumes a compressed, often single-event sale, typically producing the most conservative number of all. The same equipment carries every one of these values at the same time, and each is correct for the question it answers. For the full set side by side, see our explainer on FMV, OLV, FLV and NOLV, and for the lending choice specifically, which value the bank wants.
What makes a NOLV defensible
Three things, and examiners tend to test all of them. First, the premise has to be stated and justified, with the report saying plainly that it reports NOLV and why that premise fits the assignment. Second, the equipment has to have been observed, with serial numbers verified and condition read on site rather than inferred from a depreciation schedule. Third, the appraiser has to be independent of the transaction, with no interest in the sale and no stake in the size of the number.
Our reports are USPAP-compliant and prepared by a NEBB-certified Machinery & Equipment Appraiser (CMEA), with a narrative, an itemized appendix and photographs, so loan review and an examiner can trace a NOLV conclusion back to the assets it came from. If your file needs more than one premise, we can carry FMV and NOLV side by side in the same report. More on how we support lenders and credit teams.
Common questions
Answers, up front.
What does NOLV stand for?
Net Orderly Liquidation Value. It is the Orderly Liquidation Value of the assets, meaning the gross proceeds from a compelled sale over a limited but reasonable period, minus the costs of conducting that sale. The result is the net amount a lender could expect to recover.
What is the difference between OLV and NOLV?
OLV is gross, NOLV is net. OLV states what the equipment would bring in an orderly liquidation. NOLV subtracts the costs of selling, including commissions, removal and rigging, freight, site restoration, marketing and storage, to show what is actually left for the lender.
Why do asset-based lenders use NOLV?
Because they are underwriting recovery rather than performance. Advance rates on equipment lines are commonly set as a percentage of NOLV, since NOLV already accounts for a compelled sale on someone else's timeline and for the expenses that come out before any money reaches the bank. A gross or retail figure would overstate what the collateral can support.
Is NOLV always lower than Fair Market Value?
In practice, yes. FMV assumes an unpressured, fully marketed sale, while NOLV assumes compulsion, a limited sale period and a wholesale channel, then deducts the costs of sale on top of that. How much lower depends on the asset class, how the equipment is installed and what it costs to remove.
How often should a NOLV appraisal be updated?
It depends on the credit and the volatility of the asset class, so confirm the requirement with your lender or program. Because borrowing bases get redetermined and used-equipment markets move, lenders in an ongoing relationship commonly refresh the valuation at renewal or annual review rather than relying on an aging figure.