A machinery loan is availed to finance latest and upgraded machinery and equipment. With the help of a machinery loan, the business owner is not required to take out a huge chunk of cash from its working capital. In this blog, we shall discuss what machinery loan is and how to avail it.
A business owner would always want to give a hundred percent to its manufacturing unit. However, its success and failure much depends on the product/service quality and the time taken in manufacturing them. And the factor that affects the product’s quality is the machinery or equipment used.
Machinery and equipment is a crucial asset for manufacturing business. And it is important to ensure that there are no breakdowns. But with the current technological advancements, the existing machinery or equipment can become obsolete. And in case it is not done on time, the outdated machinery can have negative implications on the business. So, there is a need to buy new or updated machinery or equipment to ensure the business is producing to its full capacity.
What is a Machinery Loan?
There are many machinery loan providers in India. You can avail it to repair or upgrade the existing machinery or purchase new machinery. The borrower can simply start using the new machinery and make its payments in easy EMIs. You can look forward to avail a machinery loan without security or with security, according to your requirements.
The online lending companies are becoming extremely popular and preferred option for loan seekers. There are many online lending companies that offer machinery loan in Pune, Delhi, Gurgaon, Haridwar, and other parts of the country.
Who are Online Lending Companies?
The online lending companies are NBFCs who offer specialized business loans for MSMEs, ranging from machinery loan, working capital loan, and term loan to capital loan and flexi loan. The online lending companies offer online loan application form on their website or mobile App. They offer loans for business at minimal documentation, basic eligibility criteria, and lowest interest rates.
What is the Eligibility for a Machinery Loan?
Most NBFCs and online lending companies offer loans for the business of up to INR 5 lakhs. To avail a loan, the business must enjoy a minimum annual turnover of INR 10 lakhs in the previous year. The business owner must own the office premise or house and must have filed an ITR of at least 2.5 years in the previous year.
The offered equipment loans can be repaid in a flexible tenure of 6-24 months. In addition, the online lending companies do not charge any foreclosure charges in case you wish to foreclose your loan account before its tenure.
What are the Benefits of a Machinery Loan?
The various benefits of availing a machinery loan are as follows:
- The new or upgraded machinery can be purchased by just paying the margin money. So, there is no need to take out a huge amount of cash from working capital.
- There are income tax deductions on the payment of loan EMIs. This saves a lot of money.
- The product quality improves along with the quantity with the new and upgraded machinery.
- New machinery reduces the cost of production.
How to avail a Machinery Loan?
A machinery loan can be availed online through the lender’s website or mobile App. The online lenders let the borrower fill business loan application form online without having to visit the lender in person. The loan application form must be filled duly with all the required details, such as name, address, contact number, etc.
Then, you can upload the PDFs of the documents required. Notably, the documents are the proof of the information provided by the borrower and they must be submitted in the PDF form. After submitting the documents, the lender’s representative will process the loan application form.
If the loan is approved, the amount would be transferred to your account within a few days. And in case the application is rejected, you will be informed via message or an email along with the reason for it.