As a business owner, it is not always possible to expand the business due to lack of proper machinery which cannot be purchased or installed due to limited funds available. It is generally a problem of small and medium industry units, managing the finances for the daily business and after that thinking to purchase new machines is often a wild dream. Trade owners in India once faced lots of hassles securing loans for their business, and they had to run from pillar to post for the same. However, the traditional methods of giving loans by the age-old institutions have changed as more and more banks and financial institutions have come up due to the effect of rapid globalization and improved technology.  They are welcoming the business units to take a loan on soft terms and even without any security.

Getting Loans For Equipment Without Security:
Equipment and machinery are an integral part of any manufacturing business to start the unit. The production is directly dependent on the machineries, and they impact the revenue earning of the company. Machinery in the ordinary course can be bought taking loans keeping collateral security or keeping the new equipment as security.

However, many financial institutions and banks in India are offering machinery loan without security provided the eligibility criteria for getting the same is fulfilled. One needs to look into the eligibility criteria like the type of industry, the annual turnover, the orders in hand or the age of the business unit and the amount of loan required and the mode of repayment. 

Based on the details furnished by the manufacturer, the financial institution or the banks give a quote, and after one accepts the quote, the verification process is completed. Usually, all the procedures are done online except the verification and the agreement.

Although the "Machinery Loan Interest Rate" is a bit higher than the usual loan where one has collateral security still it benefits the industrial unit to channelize the funds in hand for increased production, maintaining the quality of the product or narrow the turnaround time.
The interest rates for machinery loan vary somewhat between 16% and 35 %. It depends upon the nature of the machines intended to be purchased and the nature of the business.

If the supporting documents for seeking the loan are clear without any bottlenecks, then it is straightforward to get these types of loans, and it usually is granted within a week after verification. Many financial institutes and banks have the provision in their portal to apply for unsecured loans for machinery purchase and the task of getting the loans have become hassle-free.

It is always better to take unsecured loans for purchasing machinery when there is an option as it helps the business unit to utilize the cash in hand in product development and market expansion. The market is very competitive these days and manufacturers must keep them updated with the latest technology to reap the early benefits and purchasing modern machinery with the loan without any security puts them in an advantageous position.