A significant portion of Indian economy comprises of small-medium enterprises. For subsequent years, this sector is contributing handsomely to the Indian economy. To help these enterprises run smoothly, machinery supply is necessary. Keeping this requirement in mind, several financial institutions offer machinery loan to enable SMEs or MSMEs to buy costly equipment.
With the increasing rate of competition, it has become compulsory for businesses to upgrade the way they operate. This competitive environment has led to the urgency of aiding manufacturers with advanced technology.
Along with attractive terms and competitive interest rates, they also bring you pre-approved offers on both secured credits like home loans and unsecured advances like business loans and personal loans. These offers ease the loan application process. You can check your pre-approved offer by furnishing a few necessary details. It could be an asset-based loan.
Advantages of availing machinery loan
Manufacturing businesses have to face several challenges. One of the biggest challenges is related to replacing out-dated machinery with the latest ones and still organize their business finance. Loans with low-interest rates can definitely allow small manufacturers to install new equipment to increase productivity.
There are several benefits of machinery loan, some of which are mentioned below.
- A manufacturer enjoys the benefit of using equipment or tools that are new and hence, free of any defects. Using old, defective equipment might prove damaging to your business. With machinery loans, new tools are installed without any hassle.
- The production process will undergo a drastic change as less time will be required to transform raw materials into finished products. It can be discerned that an increase in the rate of productivity can prove beneficial for sales figures.
- Product delivery will be much faster, which will offer scope to the manufacturers to send deliverables to retailers or wholesalers well within time.
- Product quality of business firm improves with the high-tech installation. To avail the best machinery loan interest rates, you can contact Bajaj Finserv as they are known to offer unsecured loans with a maximum limit of Rs. 30 Lakh.
- When production rises, deliveries reach end-users on time, thereby increasing the profit margins of business houses. Reports have shown that businesses that have availed machinery loans have achieved a higher degree of success in their business venture.
Eligibility for Machinery Loan
If you are looking for a loan to buy heavy machinery in your business. Here is a quick look on common eligibility criteria which most of the lenders demands. To avail an equipment or machinery loan of upto Rs. 30 Lakh, it will be required that your business vintage should be between 25-55 years old. The age factor should be between 25-55 years old. And you will be required to submit an ITR of past one year.
These eligibility criteria will little differ on the customer profile also. Likewise, it could be slightly different for Self Employed Professionals, Self Employed Non-Professionals and entities.
A checklist of documents is also available here which you would be required for this machinery loan. At the time of loan application, you will be required to hand over these documents. Let’s have a look at these:
- Photograph (passport size)
- Certification of Business Proof
- Bank statement
- Your Financial Documents
- KYC documents
Characteristics of unsecured machinery loan
Often, most of the prospective borrowers raise a common query of how machinery loan without collateral security can prove fruitful for businesses. Unsecured loans prove advantageous for SMEs and MSMEs alike. In case, you wish to avail loan to operate your SME or MSME smoothly and increase its profit then Bajaj Finserv offers flexible business loans to enterprises.
- Borrowers do not need collaterals to avail unsecured loans. It is fit for meeting small amount needs. However, in comparison to secured loans, unsecured credits come with higher interest rates.
- A wide range of credits is offered to SMEs because the price of machinery varies as per industries. The loan amount ranges from Rs. 5 Lakh to Rs. 30 Lakh.
- Nowadays, online processes have made the application process quite easier. As soon as an individual submit the application form, they receive a quick confirmation, and the loan is approved in minutes.
You may avail expert advice on how to make the most of your Flexi business loan and push your business to newer heights.
The application process for machinery loan
Manufactures will have to spend just a few minutes to apply for business loans. The process has been described below –
- At first, complete the application form and provide your personal details along with business-related information.
- Applicants are required to upload scanned images along with documents.
- After you submit the required details, you will receive a quick update regarding the application.
Loans offered by financial institutions to SMEs are benefitting them as they can now bring significant changes in their production process. High revenue is earned in small scale enterprises which are in turn proving fruitful for boosting the Indian economy.
