For a small business, machinery and equipment are the heart of operations especially in manufacturing and production units. Therefore, to increase and maintain the production capacity of any business, older equipment and machinery need to be upgraded periodically. Sometimes an increase in production demand requires the purchase of new machines and gadgets. A "Machinery Loan" is the convenient option to ensure timely purchase and up gradation of old machines.
When you are looking for a machine loan to grow your business, many questions arise in your mind like how to avail a machine loan, what would be the criteria of financial institutions to fund the loan, how much time it will take for disbursal and what benefits it will offer to you? Here in this article, we tried to provide you with all solutions that where to approach for loan and pre-requisites are there to avail a machinery loan. First, we will talk about the entities to approach for securing a machinery loan.
Banks: Banks are the most preferred option by the business owners but they demand collateral against the loan. The approval process of banks can also take a time since banks ask for a lot of documentation.
Non banking finance companies: This alternative is usually preferred over traditional financial institutions since a small business can get a machinery loan without collateral referred to as an unsecured loan type. The loan from NBFC can be availed with nominal documentation and set of eligibility criteria is very simple. The NBFCs allow faster disbursal considering how crucial machinery for the smooth functioning of your unit is.
Some of the pre-requisite for machinery loan are given below:
Age of business: The lenders usually fund the loans by ascertaining the business continuity and the performance of the business. A business track of at least 2 years increases the chances of getting machine loan.
Good CIBIL score: CIBIL is a rating agency which rates your credit risk that lenders use to assess your credit report and to determine your eligibility. An excellent credit score is the pre-requisite to determine the loan eligibility before you "Apply For Machinery Loan".
Business owner/business profile: Every financial institution either bank or NBFC seek business profile to have insight about the business’s vision, product line and profits. The educational background and experience of business owner are sought to make sure about the eligible person behind any business firm.
Cash flow: The machinery loan is sanctioned after confirming the financial records such as the income and the expenditure. It is a primarily check done to ensure that money invested in the business and undiversion of funds. The lenders consider ethical financial reporting while funding machinery loan to small businesses.
ShubhBank is providing easy machinery loan to its customer and number is growing by passing years. The interest rates are offered according to the loan seeker’s profile. The best thing is the speedy approval and hassle free disbursal with flexible repayment options. Choose ShubhBank as your finance partner and reach the heights of success with us.
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