Before we answer the primary question of this blog, here’s a story for you. Ramesh and Suresh are two small business owners who own factories that produce the same product. Both of the brothers believe in producing quality products for their customers, but while Ramesh has a sound knowledge of the world of business finance and different types of loans such as machinery loan, working capital loans, etc., Suresh lacks at it.
Even though the business philosophy of both the brothers is similar, Ramesh’s factory continually keeps producing better quality products. The number of products being produced at his factory also keeps increasing without any compromise on the quality. Thus, bringing in more profits to him.
Learning of Ramesh’s success, Suresh reaches out to him and then comes to know of the miracle of machinery loan. Before telling him the process of getting a machinery loan for his small business, he explains to him what it is and what are the benefits attached to it.
We are going to do the same in the blog here.
What is a Machinery loan?
One of the most important assets for small businesses is the machinery and equipment they possess. In the highly competitive business world of today, it’s extremely important to keep up with modern technological advances. Investment in state-of-the-art machinery can help small business owners increase the pace of the delivery of their products, improve product quality, and also reduce the cost of the goods they produce.
Out of the many types of business loans one can take to expand his/her business, machinery loan is an important one. For new business owners and MSME owners in the sector of manufacturing, machinery loans can be of great help. Investment in new machinery or up-gradation of the existing one is usually a costly affair. Machinery loans solve the problem of the huge capital requirement for investment in machines and equipment. It helps you in advancing your business growth without affecting the day-to-day workings of your business.
How can Machinery Loan help in Business Growth?
A machinery loan can help achieve business growth in numerous ways. Let’s have a look at some of them.
- Increase in Produced Quantity: The latest machinery and technology in your factory is bound to increase the number of products that you produce without affecting its quality. Production of more products in less time means you can focus on gaining more customers for your products and enhance sales.
- Improvement in Quality: One of the best ways to build a great relationship with a customer is delivering quality products and continually improving product quality. The latest machinery will help you do just that. A machinery loan will lead to better machinery in your factory, which, in turn, will lead to quality products, that will help you build trust among your customers.
- Increased profits: Lesser production time and higher production quantity combine to enhance the profits your business makes. The per-unit cost reduces, which can also help you in reducing the prices for your customers, thus gaining you more satisfied customers. At ZipLoan, machinery loans come with low-interest rates thus helping your cause.
- Faster Production: With new machinery, you can finish the requirements of your clients and customers before the deadlines. You would never get into an out-of-stock situation with the latest machinery and technology at your disposal.
- Lesser Defects: Defective products prove to be a wastage of time and money. For business owners, both are very important. New machinery will inevitably lead to the production of a lesser amount of defective products.
- Reduced Setting-up Time: New machinery comes with the latest technology, which reduces the time of setting it up. Just like ZipLoan’s machinery loans which are quickly processed, new machines have quick setting-up times which will save you valuable time.
What are the Eligibility Criteria for Machinery Loan?
At ZipLoan, we have easy eligibility criteria for small business owners. We understand that your focus on the growth of your business should be undivided. ZipLoan’s eligibility criteria are tailor-made for our valued customers who should have lesser things to worry about in their business journey. Below we have listed the criteria that make you eligible to receive a machinery loan from us and fastening the growth of your business.
- Previous Year’s Sales: The previous year’s sales of your business should be of more than Rs 10 lakh.
- Previous Year’s ITR: The Income Tax Return (ITR) of the business you own should be of more than Rs 1.5 lakh in the previous year.
- Business Premise: The borrower should be the owner of the business premise or house. Also, the business place and house should be separate.
- Business Vintage: Vintage is how long your business has been in operations. Your business should have been in operation for at least 2 years, which means ZipLoan looks for a business vintage of at least 2 years.
What are the documents required for taking a Machinery loan?
ZipLoan is dedicated to the idea of aiding the growth of small business owners through easy machinery loans. Hence, our quickly-processed loans require minimal documentation. Here is a list of the few documents you would need to get a loan from us:
- Income Tax Returns (ITR) of the last 2 years.
- PAN Card
- Bank statement of the past 9 months
- Address proof of the business and house
Increasing productivity and efficiency is the key to reducing business costs and maximizing revenues. New machinery will help you achieve just that. For a small business, the machinery and equipment is the most crucial asset since it determines the number of goods your business can produce and the time which it will take to do so. To stay competitive and keep bringing in profits, timely upgrade, and maintenance of your machinery is required. Our easy financing for equipment and machinery is ideal for small enterprises. ZipLoan will support your business journey through its easily available equipment loans.