With a constant rise in competition, businesses must update themselves with the latest equipment. For any business, having the latest equipment is of utmost priority. It is the key to efficient production, reduced costs, and improved profitability. But, depending on the type of business, the equipment may require significant investments. With Equipment Loan, you can make these investments without compromising on the growth and profit of the business. Here are 10 reasons you should take an Equipment Loan.
What is an Equipment Loan?
An Equipment Loan or Machinery Loan is a form of equipment financing enterprises avail of to purchase business-related equipment. It is a good option for businesses to acquire new equipment without investing a heavy amount of capital upfront.
10 Ways Machinery Loans Can Help Grow Your Business
1. Access to Modern Technology
It
is important to be up to date with the technology. However, not
every business can use cash to purchase the latest equipment.
Equipment financing allows you to incorporate the latest technology
into your business. Taking a Machinery Loan can be wise for
enterprises wanting to keep ahead of the competition in a fast-paced
business environment.
2. Increased Profitability
The
ultimate goal of any business is to maximise profitability. To
become a profitable business, you will need invest in the latest
technology. Machinery Loan can be used to purchase latest machinery
and increase your production. Also, purchasing the latest machinery
will help you significantly improve the product's quality. This will
eventually result in increase in the profitability and increase
customer satisfaction.
3. Quick Funding
Not every business
has similar liquidity to invest in new machinery or equipment. An
Equipment or Machinery Loan is a viable option when you require to
invest in new machinery or equipment immediately. Many lenders in
India have a digital loan application process with quick loan
disbursement. It is less complicated and executed quickly than
traditional financing options.
4. Better Cash Flow
An Equipment
Loan provides a significant benefit in maintaining the cash flow of
your business. Instead of paying a lot of money upfront for a piece
of equipment, this loan can help you use the same amount for a
longer period. This will help manage the overall cash flow of your
business. Many businesses focus on the preservation of capital to
fund other business operations. With equipment financing, you can
reduce the risk of low working capital.
5. Safeguarding Against Inflation
Sometimes, you are short on capital but want to buy the latest
equipment for your business. An Equipment Loan can be a boon in such a
crucial situation. By taking advantage
of equipment financing, you can safeguard your business from a
potential rise in the price of your equipment. Such savings eventually
contribute to lower costs and higher profits.
6. Repairs and Replacements
Every
machinery undergoes natural wear and tear over time. So, you will
need to ensure regular maintenance. Sometimes, you may even need to
stop using critical equipment for repairs. Doing so can risk
stalling your business operations. The funds from a Machinery Loan can
be used to repair your equipment. If needed, you can even replace it
with the new machinery.
7. High Loan Amount
Financial
institutions in India provide high loan amounts for Machinery Loans.
For instance, with Poonawalla Fincorp, you can get a loan amount of
up to ?5 Crore. With such high funds, you can buy the best equipment
and machinery for your business.
8. Flexible Tenure
A Machinery Loan
has a flexible tenure option starting from 12 months and can go up
to 60 months. You can choose the tenure as per your repayment
capacity. A longer tenure will have low EMIs. On the other hand, a
shorter tenure can get you debt-free sooner.
9. No Collateral Needed
An
Equipment Loan is an unsecured loan, so you do not have to pledge
any asset as collateral. Equipment financing gives you access to
the funds you need while guaranteeing that ownership of the
equipment remains with your company, giving you complete control
over your business operations.
10. Tax Benefits
Companies can
profit from equipment financing in a variety of ways. Equipment Loan
is tax deductible, which helps to lower the overall taxable income
from a business. These savings might be reinvested in growing the business.
Conclusion
An Equipment Loan can be used to purchase equipment for your business without spending a large amount of money upfront. The saved money can then in turn be used to expand your business and generate more profit. Factor in your business goals, the type of equipment needed, and research the lenders before applying for this loan. If you want funds to purchase machinery with attractive terms and an easy online process, consider applying for a Machinery Loan with Poonawalla Fincorp.
Frequently Asked Questions About Equipment Loan
1. What is a machinery equipment loan?
It is a loan that helps you to buy, lease, repair, or upgrade
your machinery without compromising your working capital.
2. What are the benefits of equipment
financing?
Some of the benefits of equipment financing
include improved cash flow, lower initial expense, tax depreciation
benefits, and protection against inflation.
3. Can I get a loan on old machinery?
Yes, you can get a loan on old machinery. However, the
eligibility criteria differ from lender to lender.
