Like business loans, MSME loans, car loans, home loans, and education loans, there are many different types of loans available in the market, which are offered by a variety of financial institutions.
There are furthermore many categories of loans under business loan among which machinery loan is a type.
A machinery loan is a business loan category obtained to help people finance their equipment or machinery needed for running a business.
If you have modern equipment and tools for your business, you will automatically see a rise in overall business activity.
Latest -p-to-date equipment helps a lot in expanding one’s business. But the tricky part is where you have to get the finance for them.
Here you will know all about machinery loans and how you can apply for this loan.
Table of Contents
What is a machinery loan?
A machinery loan can clear all obstacles in your path to finding financing for your business equipment. This way, you can succeed in your business easily.
To put it another way, a machine loan is a subcategory of a business loan that will help you get the required financing for business equipment. This helps all the business entities, entrepreneurs, or business owners of varied business types.
With this financial help, you can increase your productivity with new devices. An increase in productivity will directly result in an increase in overall profits because of distribution and sales.
Eligibility criteria to apply for machinery loan
The following are the eligibility criteria that you must obey to apply for a machinery loan.
- The applicant’s age to apply for a machinery loan must be within 21 – 65 years.
- Before you apply for the loan, you should prove that your business is at least two years old.
- Additionally, you should have the income tax return documents for the past two years before applying for a loan.
- If you have any previous loan or if you are a defaulter, you are not eligible to apply for the loan.
- If you are applying for a loan this month, you should have your bank statements ready for the last twelve months.
You can specify that the purpose of applying for a machinery loan can be either to repair a faulty machine or to get an upgrade for a better version.
Advantages of machinery loan
You can not only have finance for your damaged machinery but have many other advantages of getting a machinery loan. Some of them are mentioned below.
- The upper limit of this loan is very high. You can get a machinery loan up to two cr. These loans will provide you with high working capital whenever needed.
- These loans are collateral-free. This means that you do not have to provide the lender with any kind of guarantee or collateral to receive the money in India.
- These loans provide the facility of Flexi loans. This is an innovative and unique feature available with this loan. It allows the borrower to manage the received finance in a much smarter and effective manner.
- This loan is also called an equipment financing loan or working capital loan because it provides finance for equipment or machinery purposes.
- This loan helps you modify, refurbish or even replace the present equipment in your business.
- It provides high flexibility options for you to repay the loan with easy EMIs.
- This loan is very beneficial for those businesses that have just started.
What documents do you need to apply for a machinery loan?
Before you get into finding out what documents you might need, check if you are eligible to apply for the loan beforehand. If you are, then the following are certain documents that must be produced first and made ready.
- Proof of business: To provide the proof of business, you must have a certificate of practice at hand that states the nature of your business. This certificate will act as legal proof that your business is legitimate and help establish the reason for the machinery loan subsidy.
- Past accounts: Along with the financing, the accounts for the past three years should be attached with the rest of all documents. This is because to understand the revenue of the business for the past three years earned by the company or business.
- Residential proof: You have to provide proof of your residence or business for applying for this loan. For this purpose, the company pan card or any other legal documents that have an affiliation with the business residency could be provided.
- Identity proof: Finally, you should provide proof of your identity with all other documents. For this, the KYC or ( Know Your Customer ) document should be attached with the rest of the forms and documents for your application for a machinery loan to be successful.
How to apply for a machinery loan
If you are eligible for this loan and have all the necessary documents, then we can dive into the process of applying for the loan.
- Step 1 – When applying for a machinery loan for your new business, the first step is to check your eligibility. Compare the list with your current situation and make sure you are eligible at the time to apply for the loan. Otherwise, your application will be rejected.
- Step 2 – The next step is to fill the form and submit the application for the desired business loan. This submission can be done online or offline too. You can either choose to hand out a physical application form or type the details online and click the submit button.
- Step 3 – This step requires your patience. After submitting your application, you will have to wait until an affair sanction is proposed.
- Step 4 – Finally, when your application gets sanctioned, you will be able to acquire your funds and use them to upgrade or repair your business machinery.
At Zip loan, we provide various types of MSME loans and Business loans, including machinery loans. For further details about how you can apply for this loan, contact us at 011 – 4310 – 9577 today. We guarantee that we can provide you with loans within three working days!
Frequently Asked Questions
A machinery loan helps you obtain financing to buy new equipment for your business.
You can use an equipment loan to purchase anything from office furniture and medical equipment to farm machinery or commercial ovens.
Procedure to Avail a Small Scale Industries Loan:
1) Fill up the online application form on the lender’s website. For offline application, obtain the form from your nearest branch to apply.
2) Submit all documents required to your financial institution.
3) Receive approval on your application.
Equipment finance describes a loan or lease that is used to obtain business equipment, which can be any tangible asset other than real estate. Equipment financing may be through obtaining a loan to purchase equipment or by leasing equipment.
An equipment loan is a common financing solution for businesses that need new equipment or vehicles, but lack the financial capability to pay in cash. In most cases, the immediate returns from the newly acquired equipment can be used to cover the monthly payments for the loan.