What is a Machinery Loan?
The purpose of a machinery loan is to borrow funds for buying, leasing, repairing, or upgrading machinery. It’s a type of business loan that helps you boost productivity without affecting your cash flow.
A business’s machinery and equipment should be modern and up-to-date. They help produce high-quality products and deliver flawless results. A business cannot always afford to buy machinery all at once as it is an expensive investment. Hence, obtaining a machinery loan can help meet this need efficiently. Manufacturers and other business owners can apply for a machinery loan to acquire machinery for their businesses. Through increased sales and distribution, business owners can acquire better equipment and increase their profits. With the help of a machinery loan, small business owners can buy advanced equipment, boost sales and expand distribution to raise earnings.
What are the Benefits of a Machinery Loan?
For the following reasons, purchasing the most recent and advanced equipment allows business owners to operate without interruption and that can ultimately save the company money.
One of the key benefits of modernising your equipments is that a machinery loan ensures the protection of your reputation in the market by maintaining on-time delivery. Furthermore, the newer equipment reduces project turnaround times and error rates significantly. More sales will result from more productivity, which can increase profitability.
Suitability and Flexibility
Due to the flexibility of the programs, getting a machinery loan for business expansion makes sense. Since there is no requirement for collateral in this loan category, you can make better use of your assets.
Making Sure Cash Flow is Maintained
If you can guarantee that manufacturing occurs ahead of schedule in an effective and almost defect-free manner, your business’s cash flow will typically be positive. You can utilise this extra money to pay your suppliers and raise your credit score at the same time.
Fast and High-Quality Production
It is possible to achieve fast and high-quality production. You can do this with the help of upgraded and improved equipment you buy with a loan. You can maintain a reputation for high quality while delivering your goods on schedule without hurting the supply chain.
Eligibility Criteria for Machinery Loan
- The applicant must be at least 51 years old and no older than 65 years old
● Business should be a minimum of 5 years old
● Last 5 years’ ITR required to avail of this loan
● Last 15 months’ bank statement required for this loan
● No defaults on any previous loans should be listed against the borrower
Documents Required for Machinery Loan
- KYC documents
● Passport-size photographs
● Identity proof, such as PAN, Aadhaar, passport, and driver’s licence
● Address proof, such as utility bills, Aadhaar, passport, and driver’s licence
● Income proof
● Bank account statement for the last 15 months
● Facility sanction letter
● Quotation of machinery to be purchased
Tax Implications on Machinery Loan
Many different types of company loans are eligible for tax benefits from the Indian government, particularly for small business. Machinery loans are one type of loan that offers tax advantages. In other words, you can deduct the interest you pay on a machinery loan from your taxes. The principal portion of the loan is exempt from this rule. In any scenario, a reduction in your taxable income will reduce your overall tax liability for the fiscal year.
You must be ready for machinery’s normal wear and tear when working with them. Obtaining working capital loans in the form of equipment loans can help you not only maintain and repair your machinery but also ensure the smooth operation of your business. Therefore, avoid having a machine upgrade delayed because it will affect your production. Make an informed choice of the right capital loan using the variety of options discussed above, and create new pathways for the growth of your business.
What are the Benefits of Choosing HFS for Machinery Loan?
Fast and Easy Process
When it comes to machinery, you want things to move quickly to avoid an impact on your company’s productivity. At HFS, business loans for machinery finance are disbursed much faster than most other loans. Within 54 hours, your funds will be transferred to your bank account. This will allow you to scale operations quickly without wasting any time.
You can book an appointment with us online, and a representative of HFS will be at your doorstep with answers to your queries related to machinery finance.
Flexible Repayment Tenure
The tenure for our smart loan goes up to 5 years; while that for a secured business loan goes for as long as your business needs.
Easy Eligibility Criteria
As long as your annual income is above 1,00,000/- p.a. in metro cities and 75,000/- p.a. in non-metro cities, you are eligible to apply for our equipment and machinery loan.