Equipment finance is a better option for businessmen who want to buy new equipment or machinery without spending their working capital. But many businessmen believe that the option of equipment loan is only for big businessmen, who are earning good money in business.
But machinery loan can also be taken for small business. If you are thinking that the equipment finance company will ask you to pledge something for machinery, then you are wrong. You can take a machinery loan without guaranteeing anything. You will also be happy to know that there are many lenders in India who offer unsecured equipment finance loans. So only you have to find the right lender.
To make a good decision, you should know why you need a machinery loan and how much money you need. Read further for more information.
What is equipment financing
Equipment financing is used to buy new machinery and equipment for business in India. It can be a secured or unsecured loan. However, some lenders consider the machinery purchased as a guarantee. If default occurs, they take back their machinery. However, this reduces the risk for the lender.
The repayment period for equipment loan can be from 6 months to 24 months. Equipment finance loan will depend on the credit profile of the customer, how much it matches the eligibility criterion of the lender. In addition, a good CIBIL score also plays an important role in low interest rates.
Machinery loan is a good way to purchase machines that are capable of running the production smoothly. The good news here is that since the machinery itself is a guarantee (in collateral loans), it becomes easy to take it.
What are the qualifications to get an equipment loan?
There is no fixed scale for qualifying an equipment loan. But these are the basic things that every lender checks.
– Business has been done for two years.
– CIBIL score should be at least 715.
– Annual turnover should be 10 lakh or more.
– Last year, ITR of 2.5 lakh or more should be filled.
What documents are required for equipment loan?
With the help of technology, now equipment finance companies in India are giving equipment loans easily. Also, compared to the messy documentary process, lenders have started taking loans on less paperwork. Due to less documentary requirements, it has become easier for business owners to get loans.
If you are taking an equipment loan, you will need these documents:
– Pan Card
– address proof
– ID proof
– Bank statement
How to get equipment loan?
To take advantage of the equipment finance scheme, follow these steps:
– Choose the right lender. There are many lenders in India who loan for equipment. You have to find a lender who provides the best industrial equipment loan on terms of less documents and basic qualifications. See also a lender who has low interest rates, low processing fees and no hidden fees.
– After finding the right lender, apply for the loan. But we would advise you to check that you meet the qualification scale of the lender and that you have all the necessary documents before applying for the loan.
– Many lenders use technology to further increase the capacity, which makes it easier for customers to apply for loans. Therefore, you can apply the loan online and submit the same documents there.
– After applying the loan, the lender will check your eligibility and documents. If everything is correct then your equipment loan will be approved. In a few days, the sanctioned amount will come to your account.