Industrial units are always in the need of machinery or equipment to expand their businesses. This is where the need for a machinery loan comes into play. Financial institutions and various NBFCs like Ziploan have constituted a method whereby they can help industries availing machinery loans at attractive interest rates. However, the applicant has to be sure whether a machinery loan is required or not.  

Here are the situations that may require you to get a machinery loan. 

What is a machinery loan? 

Before we delve deeper it is pertinent that we know what a machinery loan is. 

A machinery loan is a business loan solely availed for investment in the equipment. This is to ensure continuity in business and production of the plant, which otherwise might have faltered. 

  • Situation 1 

When you are part of an industry that requires machinery, then availing a machine loan becomes a necessity. Machinery undergoes wear and tear and has to undergo heavy maintenance. Industries like manufacturing, transport, cement, oil require heavy machinery. 

A machinery loan is also required for the expansion of the business. A plant has to be built to accommodate surging orders and this will require a business loan. To acquire the required machinery, a machinery business loan is required. 

  • Situation 2 

Opportunities arrive suddenly and in the heavy manufacturing industry, these have to be taken advantage of.  A missed opportunity can be highly regressive for businessmen, especially when the competition is high. A machinery business loan will be helpful for the applicant to tide over the critical phase and get the wheels of the business rolling. 

  • Situation 3 
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Expansion of business is always a dream for any industrialist. They would want to see their business grow and prosper. For heavy industries, this would mean, buying new equipment, creating plants, building an infrastructure where man and machine can together create magic.

All of this will require a large sum of money. Machinery finance, in this case, is the ideal business loan, which will help him or her to achieve the said goals. 

  • Situation 4 

Acquiring a large piece of machinery at a discounted rate is akin to a windfall for any industrialist. However, even the discounted price would run in a huge amount and would require financial assistance. It is in this instance, that the industrialist, would avail of a machinery loan.

The discounted machinery will then be used to expand the business and create more revenue channels for the organizations. Hence, it can be safely said that a machinery fund works as a force multiplier.  

  • Situation 5 

As suggested earlier, machinery in factories is not expensive to buy but maintain too. They are constantly undergoing wear and tear and require round-the-hour observation.

They also breakdown and has to be replaced with a new and more advanced version, that will require more funds. This is a financial cycle that ceases to stop. It is also a situation where a machinery loan will be required. 

  • Situation 6 
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Industries are always engaged in the competition. The competition is between companies who have to compete to stay relevant. Financial support is essential for this to happen. A machinery loan with attractive interest rates goes a long way in helping the company compete with its rivals.  

Lastly, A machinery loan is a business loan solely availed to acquire, upgrade, or maintaining machinery for the plant. They are not unsecured business loans or new business loans but are generally provided to companies with proven vintage. Based on firm evaluations and backed up by a sound business plan, a machinery loanis rewarding for all the parties concerned. 

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Frequently Asked Questions

What are the benefits of availing a machinery loan? 

The major benefits of availing a machinery loan is enhanced productivity, fast turnaround time, and improved quality of products. 

What are the documents required to avail a machinery loan? 

If you wish to apply for a machinery loan, you need to have very minimal documentation, which includes; 

Business proof 
Past 2 years of ITR and minimum of 9 months of bank account statement 
Resident proof 
Identity proof