Equipment Loans For Your Business Expansion
Regardless of the nature, size and type of your business, there will be a time when you will have to upgrade, improve or replace various pieces of equipment.
Any machine that is needed for your business to run efficiently needs to be in sync with the market and in a working condition. Right equipment and tools can help your employees deliver better results leading to the overall growth of your business.
Banks and financial institutions have industry specific customised equipment loans. Research the market well and try to find lenders to cater to your industry type.
Based on the nature of the equipment and the expected life-span, the tenor of the loan is determined by the financial institution. This is a secured loan and the equipment serves as a collateral. The amount of loan sanctioned depends on the nature of the equipment and if the equipment is new or used.
• Attractive Interest Rates: The equipment loan helps you with your expansion plans without burning a big hole in your pocket. The loans are available at reasonable rates by the virtue of being secured.
• Money in Your Pocket: Instead of spending money on high value items from your business revenues, equipment loans can help to replace or repair this vital piece of equipment.
Steps in Securing an Equipment Loan:
Like any other business loan, the credit history of your business along with your personal credit score are primary factors that help the financial institutions decide if they want to extend a loan to you or not. Banks and financial institutions stress a lot on lending to people / businesses with a good credit history to avoid defaults. Maintaining a good credit score is an ongoing process and must be stressed upon at all times so that you can apply for a loan as and when the business demands it.
Comprehensive Business Plan:
Typically, equipment finance is sought by business owners for expansion of their current business. Hence, the lenders might want to look at your business plan to ensure that you can continue paying the instalments in the future. It is recommended to have a plan ready before applying for this loan. If the lender feels comfortable with your business plan and revenue model, the chances of getting an approval increase.
This is undoubtedly the most critical aspect of your business which needs to be in place to get an approval for an Equipment loan. Having a solid cash flow statement ensures that the lender feels comfortable and sanctions the equipment loan.
To Sum it up:
Before applying for an equipment or a machinery loan, ensure that you have these basic items ticked on the checklist to ensure a quick approval of the loan. Though it is a secured loan, banks and financial institutions have certain eligibility parameters in place which need to be fulfilled to avail a loan from them.
Bajaj Finserv offers a special business loan for professional that can be easily availed.