Equipment Loan

Get Equipment Financing for Your Business & Types of Equipment Loan

August 26, 2023 • 6967 views

As a business owner, you know the importance of investing in the best equipment and machinery and keeping them in great condition. After all, doing so helps in improving overall productivity and scaling your business. However, this requires significant investment, and using up your existing revenues and working capital is not ideal. Therefore, when faced with such situations, you can always consider opting for Equipment Financing or Equipment Loan. In this article, learn how you can get equipment financing for your business.

What is Equipment Financing?

In simple terms, equipment financing or equipment loans are a credit facility that empowers business owners to buy equipment. This is also considered an excellent option when it comes to industrial equipment financing. With advanced and powerful machines, you can manufacture on a large scale, perform complex tasks, and much more. 
What’s more, by getting the funds on time to purchase heavy-duty equipment, you can improve the efficiency and productivity of your business. Such investments in machines are key to running a successful enterprise; hence, equipment financing becomes a critical instrument for business growth.

How to Get Online Equipment Financing

Consider Your Financial Position

A loan should add value and fulfil your specific financial requirements. So, review your finances thoroughly before applying for an equipment loan. It will help you determine whether you can repay the loan on time, based on the tenure and loan terms.

Maintain a Good Credit Score

Lenders check your credit history as well as your business’s credit history before approving your loan. So, always ensure that no dues are pending from your end. A healthy credit history is of utmost importance for securing an equipment loan, especially for small businesses. A high credit score (750 and above) can also make it easier for you to negotiate the loan tenure, lower interest rate, and better terms.

Conduct In-depth Research on Multiple Lenders

There are several lenders in the market that provide equipment financing. It is advisable to go through their loan terms and conditions, interest rates, and other important factors before choosing the best offer. At the same time, ensure that you are meeting their loan eligibility criteria.

Be Ready with a Great Business Plan

You want to show a potential lender that your business will continue to be profitable. For this, provide them with a comprehensive business plan. It can include the existing cash flow and long-term business goals, among other important details. Give them a clear understanding of how you are planning to use the borrowed funds. All of these can help lenders be assured of your repayment capability.

Keep Your Documents Ready

Keep all the relevant and important documents related to your business ready to be submitted during the application stage. This can include insurance policies, tax returns, proof of ownership, bank statements, balance sheets, and more. Check with your lender about every required document so you can complete the loan application process smoothly.

Types of Equipment Financing

Machinery Loan

A Machinery Loan is specifically created for those who require funds to buy equipment for the production of their goods. You can also use these loans for industrial equipment financing. Some NBFCs like Poonawalla Fincorp offer hassle-free Machinery Loan of up to ?5 Crore.

Also Read :- Eligibility Criteria to Apply for Industrial Equipment Loan

Medical Equipment Loan

If you are in the healthcare industry, you will require advanced equipment for performing diagnoses, operations, and more. A Medical Equipment Loan provides the necessary funds to buy advanced equipment and provide patients with excellent care and service.

Construction Equipment Loan

A construction business requires complex and heavy machinery. You can avail of equipment financing to access funds for the purchase of such machinery.

Electronics and Appliances Loan

If your business requires you to purchase advanced electronics equipment and appliances, then equipment financing is the right solution for you.

Conclusion

When considering the purchase of equipment, it is generally advisable to make such an investment only if it will be needed for at least a two-year period. This approach can help ensure that resources are allocated in a prudent and effective manner, with the long-term interests of the organization in mind. Many lending companies offer equipment financing services that are suited to your specific requirements. Go ahead and apply for equipment financing to optimise production, boost output, and get an edge over your competitors.

Frequently Asked Questions

1.    Who is eligible for equipment financing?
These will vary depending on your lender, but here are a few of the most common requirements:

  • Your age must be between 25 years to 65 years.
  • You should have a minimum business vintage of 3 years.
  • You must hold Indian citizenship.

2.    How long can you get a loan for equipment?
Some leading financial institutions like Poonawalla Fincorp offer equipment loans with a repayment tenure of up to 5 years.
3.    What is an example of equipment financing?
Some of the most common examples of equipment financing include Machinery Loans, Electronics & Appliances Loans, and more.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Machinery Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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