SOME THINGS TO KEEP IN MIND BEFORE APPLYING MACHINERY LOAN

For a small scale business, primarily one in manufacturing and production, machinery and equipment are the heart of operations. Older machinery and equipment need to be changed or upgraded periodically to maintain and increase the manufacturing capacity of the business. At the same time, an increase in production requires purchase of new machinery and equipment. A machinery loan is often necessary to ensure timely purchase and upgrade of machinery and equipment. Now the questions that might come to your mind may be how I can avail a machine loan, what are the criteria for qualifying the loan, how much time would it take to avail the loan and what are the benefits of taking the machinery loan? It must be noted that there are some things to keep in mind before applying a machinery loan depending on the eligibility of the small business.

Pre-requisite for machinery loan:

Age of business: 
To ascertain the business continuity and the performance of your business unit, lenders usually don’t provide credits to new projects unless backed by renowned investors. A business record of at least 3 to 5 years improves chances of getting a machinery loan.

Good CIBIL score:
Credit Information Bureau India Limited is a credit rating agency that maintains and rates your credits, which lenders use to assess your credit history and determine your eligibility. Outstanding credit history is the pre-requisite to determine your loan eligibility.

Director’s /company profile: 
All lending institutes seek company’s profile to have insight about the company’s vision and products line. Educational qualification and experience of promoters are sought to make sure about the person behind any business.

Cash flows: 
Financial records confirming the income and expenditure are asked before sanctioning the "Machinery Loan". This is predominantly done to check that the money is invested in business and there is no diversion of funds.

Other points to consider before applying for loan:

Know your business requirements
If you already have an existing machinery, evaluate your production output to see how new machines can help to increase productivity. Compare the various options in the lending market.

Understand space availability
Machinery requires proper allocation of space for efficient functioning and an unplanned placement could lead to accidents at work resulting declining productivity. Therefore, before "Applying For an Equipment Loan" prepare a layout plan to determine exactly where you will place that equipment.

Consider a new or second-hand machines as per requirement
Second hand machinery is a viable option if it has been properly maintained. However, it is cheaper but eventually, it may need more maintenance than a new one.

Moreover, once you have planned the machinery loan from ShubhBank, machine buying is much easier where you can buy machines either old or new without any complicated procedure. Just register yourself, specify your requirements, choose the machine from a wide range and connect directly with our loan representative. Yes, it is really simple as it sounds. Choose ShubhBank as your finance partner and the next success story could be yours.