Equipment Loan

10 Reasons Why You Should Take an Equipment Loan

September 05, 2023 • 6817 views

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.

 

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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