A machinery loan without security can be used to buy new machinery or to upgrade to new version. And new and upgraded machinery can result in decreased cost per unit and increased production. In this blog, we shall discuss machinery loan without security and various other aspects related to it.
A business loan is a saviour for small business owners who face shortage of funds. However, there are many questions that the borrower has which often leads them away from the business loan. To ease their this difficulty, we have tried to answer all those questions in this blog in the easiest way. In this blog, we have tried to answer about machinery loan without security and all other types of business loans and how to avail them easily.
What is Collateral?
Also Read: What Are The Benefits Of Availing A Machinery Loan?
A collateral is an asset or property that has some monetary value. It can be a property, vehicle, stocks, fixed deposit, or anything for that matter. A collateral is hypothecated against a loan in order to secure it in case of default by the borrower. A collateral provides the lender security of the loan being repaid. In case of default by the borrower, the lender can seize the collateral and recoup the losses. Therefore, collateral is an important business loan requirement for banks since they do not offer a business loan without collateral.
Can you get a Small Business Loan without Collateral?
The answer to this most burning question is YES. There are many small business owners out there who cannot offer an asset as collateral or cannot take the risk of offering an asset as collateral. For them, there are unsecured business loans or business loans with collateral. Unsecured business loans are usually offered by NBFCs and online lending companies since banks are not willing to risk their money.
The unsecured business loans are specially designed for people who cannot hypothecate a collateral. The entire concept behind the business loan without security is offering financial aid to small business owners in terms of finances and help them take their business forward in positive direction.
Loan for business without security are offered usually by NBFCs and online lending companies. These companies design their business loan products keeping the requirement of the small business owners in mind and ensure their financial needs are met in every possible way. So, the best option to avail a machinery loan without security is an NBFC or online lending company.
What is Machinery Loan without Security?
Many people don’t know about this type of business loan and often search on the internet What is equipment loan since they nothing about it. Well, this is a type of loan for machinery purchase. Here, the borrower can avail a loan to purchase machinery or equipment or to upgrade it new version. A machinery loan for new business or an ongoing business can be beneficial since it can prove to be beneficial in increasing production. There are many lenders who offer machinery loan at the best rate of interest.
What are the Different types of Business Loan?
In order to ensure that the business loans help the small business owner in every possible way, there are different types of business loans that he can avail apart from the machinery loan without security. The following are the other types of business loans available in the market:
Also Read: Different Types Of Business Loans In India
Capital Loan
As the name suggests, a capital loan is availed to meet the capital needs of a business-increase the capital, generally for business expansion. It is often seen that even after generating good profits, a business seldom could save funds for expansion. In such scenarios, a capital loan for small business can be very beneficial. The funds so availed under small business capital loan can be used for business expansion. The capital loan interest rates in India are very competitive and this type of loan can certainly prove to be beneficial for small business owners.
Working Capital Loan
A working capital loan is of use for businesses who are facing a paucity of funds and face difficulty in financing the everyday working of the business. There can be various reasons for a paucity of funds. People who are in business would definitely know that a business usually works on credit. A business may be waiting for his dues to get clear from his client and for the time being, he can avail an unsecured working capital loan to meet the business requirements. The funds so availed under loan for working capital can be used to pay utility bills, salaries, wages, etc.
Flexi Business Loan
A flexi business loan is useful for business owners who have an uncertain business and may witness the requirements for funds at any time. There are times when a business requires funds so urgently that it cannot even for business loan processing. A flexi business loan is specially designed for businesses like these. Here, the business gets a credit limit sanctioned from the lender which he can use any time. He would be charged interest only on the amount used. The flexi business loan comes with a flexi EMI option.
What is the Eligibility for Business Loan?
Also Read: Business Loan Eligibility: Criteria For An NBFC Business Loan
The business loan eligibility set by the NBFCs and online lending companies is not very stringent. Most of the usually lenders ask for:
- Minimum Turnover of INR 10 Lakh in the last 12 months.
- Last year ITR of more than INR 2.5 Lakh.
- Either house or business premises should be owned.
- Business place should be separate from the residence.
- Business vintage (operations) for at least 2 years.
How can I get a Machinery Loan without Security?
Now comes the most important question, how to get a machinery loan or how to get a business loan for that matter! Well, but as difficult as this question may seem, the answer is the easiest. With the advent of the technology, availing a business loan is just a few clicks on the computer screen or few taps on the smartphone screen away. Get a small business loan in 5 steps:
Also Read: Get Unsecured Business Loan From ZipLoan
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Apply Online: Now most of the business loan lenders have an online presence, i.e. they offer their services through website or mobile App. This eliminates the need for the borrower to personally visit the lender. So, you can apply for a business loan online via lender’s website or through mobile App.
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Business Loan Application: Fill the business loan application online. Duly fill the business loan application form with all the required details with the correct information. Most of the lenders ask for business age and last 12 month’s turnover apart from the applicant’s name, phone, city, and other KYC details.
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Submit Documents: Business loan documents are an important business loan requirement. Most of the lenders ask for PAN card, last 12 months bank statement, last 2-3 ITR, and business and residence address proof. Through these documents, the lenders calculate your business loan eligibility. Well, here the cherry on the cake is while many banks depend on the CIBIL to check your eligibility, many online lenders and NBFCs have their own credit evaluation process. You can upload the PDFs of the documents on the website or the App.
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Business Loan Approval: After submitting the business loan application and the required documents, now you are just 2 steps away from the business loan—approval and disbursal. The lenders these days use their own credit evaluation system along with the CIBIL to check your business loan eligibility. With this system, your business loan eligibility increases, significantly improving your chances of getting a loan for business without security as well.
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Business Loan Disbursal: NBFCs and online lenders offer fast loan disbursal. Also, since you are availing capital loan, working capital loan, or machinery loan without security, there is no need for the lender to calculate the value of the collateral hypothecated. This also decreases the overall turnaround time for the borrower. The funds availed will be directly credited your bank account in a few days, if the machinery loan without security is approved.
ZipLoan is an RBI registered NBFC that aims to help small businesses thrive with the help of easy business loans. We offer SME loans of up to INR 1-5 lakhs at easy terms and conditions.
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