Machinery loan has been there in the financial market for quite some time now, allowing businesses to fulfil their big-ticket machinery purchase/upgradation needs. These advances are available as both unsecured and secured SME loans and come with several attractive features that the borrower can benefit from. These advances are specifically designed for the purchase of new machinery inclusion in the business and can be quite beneficial if timed well.
Here are some crucial details related to the funding option which you might be willing to know if you were planning to fund your business’s machinery/equipment purchase or upgrade through external financing.
Common Features of Loans for Machinery Purchase
- High financing value: You can avail a machinery loan in a high financing quantum to suitably fulfil your business’s funding need for the purpose. While these unsecured funding options are available with a financing value of up to Rs.25 lakh, secured funding can be quite high, enabling easy purchase of even the costliest equipment.
- Digital financing: These loans are easy to avail as small business funding online as you simply need to access the lender website to apply for the advance. Document submission is also supported digitally, so you do not need to step out of your home.
- Collateral-free funding: These loans are commonly available as unsecured advances and do not require a borrower to provide any asset as collateral. Individuals only need to meet a handful of eligibility requirements to apply.
Top Advantages of Availing a Loan for Machinery Purchase
Some crucial advantages of securing a machinery/equipment loan for your business include the following.
- Strict adherence to production deadlines
An overall improved capacity of production due to the presence of a new and more efficient machinery and/or equipment means strict adherence to deadlines for timely production.
- Productivity improvement
With a reduced production turnaround duration due to the presence of improved equipment, the overall productivity of the business increases.
- Defect reduction in production
A new and efficient machinery would mean a cut-down of production defects as well, thus resulting in an improved overall quality.
- Reduction of repair expenses
Since the machinery/equipment set up would be new with the help of a machinery loan, the repair cost of the business would be cut down to a minimal as well.
Situations in Which a Business Can Resort to a Machinery Loan
A business can seek out small business funding online as machinery/equipment loan under the following common circumstances.
- Heavy reliance of business on machinery/equipment: Your business may be operating in one of the industries that relies heavily on machinery for operation and production, like construction, manufacturing, metallurgy, agriculture, etc. Purchasing equipment at such large scale can prove costly for the businesses, which is why a loan for machinery may be needed.
- Availability of new and exciting opportunities for the business: A business may come across new opportunities from day to day, which may require additional asset backup for production. In such a scenario, a machinery loan can be just the right bet to go forward with.
- Asset addition to the balance sheet: A business may also be needing to add asset to its balance sheet, in which case a loan on machinery can come in handy.
- Discount availability on machinery sale: In case there are remarkable discounts present on a machinery or equipment item, one can make the most of this opportunity by making required purchase through a loan on machinery.
- Expensive equipment upgrade needed: In case your business needs a machinery/equipment upgrade which is costly, a dedicated loan option can just come in handy.
A machinery loan can be a great option of long-term financing assistance for a business. You must create a repayment plan for timely EMI payments towards the loan liability created as these are long-term advances and require diligent repayment planning.
