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Machinery Loan
If you’re a business owner, then you know that growing your operation is essential to success. But often, the upfront cost of new equipment can be prohibitive. That’s where machinery loans come in.
A machinery loan, also known as a construction equipment loan, is acquired by business owners or entrepreneurs looking to finance the purchase of new machinery or equipment to enhance their business operations, without having to worry about the upfront cost. This type of loan can also be used to upgrade or repair the existing machinery to help your business increase productivity by allowing it to take advantage of new, cutting-edge technology.Â
Most banks or lenders offer a machinery loan of up to 80% to 90% of the market value of the equipment required to ensure the financial growth of a business. This loan allows businesses to maintain a strong cash flow while still being able to invest in the latest and best machinery on the market. This loan is a great way for businesses to grow and expand their operations without having to worry about the upfront cost of the equipment.
So if you’re looking for a way to finance your next piece of equipment, consider a machinery loan. It could be the key to growing your business.
There are plenty of options available to you, depending on the amount of money you need to borrow and the terms you’re looking for. Don’t be afraid to shop around and compare rates before making a decision. With a little bit of research, you’re sure to find the perfect financing option for your new machinery.
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Unique Points & Features
Flexi loan facility
The Flexi loan facility on the machinery loan will allow the borrowers to pay interest only for the amount used on the total sanctioned cash limit rather than the entirety of the cash limit.
Larger funds
Selected NBFCs, SMEs, finance banks, etc. at Loanz360 are willing to work with customers looking for more significant funds of the loan amount up to 3crore without required collateral on the loan amount.
No end-use restriction
There are no end-use restrictions on loans sanctioned. The borrower may use their funds at their discretion in the best interest of their business and are not entitled to disclose their usage of the loan to the bank or the lender.
Quick disbursal
Most banks at Loanz360 work towards processing loan applications faster within 24 hours of their submission.
Flexible repayment tenor
Financial partners at Loanz360 offer a flexible repayment tenor on machinery loans some extending up to 5 years, on average lasting from 1 to 3 years.
Collateral-free loan
The loans provided are collateral-free. That is, the borrower need not submit security on the loan for and up to the maximum amount allowed by the bank.
Types
Term Loan: A term loan can be a secured or unsecured loan paid in the entirety of the loan over the set intervals for the amount borrowed with interest in full.
Flexi Loan: Flexi loan unlike term loan has a cash limit. The borrower can withdraw any amount from the cash limit and may pay only for the amount used rather than the entirety of the available funds.
Lease Loan: A lease loan can be used to finance the purchase of certain types of machinery, such as aircraft or vehicles. Leases typically have lower monthly payments than loans but may have higher interest rates.
Eligibility Criteria
Age: 21 – 65 years (Conditions Apply)
Type of Employment: Self-Employed/Business Owner(Govt, Partnership Firm, Large Enterprises, MSME, etc.)
Nationality:Â Resident Of India
Income: Minimum ~ Rs. 2,00,000/- p.a onwards
Credit/CIBIL Score: Any profile(Credit score ~ 650 or above has a higher chance of getting a quick and instant loan with high funding at lower interest rates)
Business Vintage: 2Â – 3 years and above (Business should not be blacklisted)
Note: The eligibility criteria mentioned above are generic and may vary from lender to lender. Please reach out to us at Loanz360 for a personalized eligibility chart.
Documentation
Note: Documents requested may vary from lender to lender, contact Loanz360 for any inquiry.
Proof of Identity and Address – Voter’s ID/Passport/PAN Card or Form 60/Driving License/Aadhaar CardÂ
Additional documents accepted for address proof include Electricity Bill/Ration Card, Copy of Utility Bill/Insurance Bond/Bank Statements/Income Tax Assessment Order/Property Registration documents/Pensioner Book/Property Tax Receipt/Employer Certificate
Income Proof Documents – Latest bank statements of the past 1 year/Latest copy of Income Tax Returns (ITR)/C.A certified Balance Sheet/Profit and Loss Statements/Ownership Proof/Business Registration Certificate/Existing facility sanction letter
Additional Requirements: Duly filled application form/passport-sized photos
Charges & Interest Rate
CURRENT CONSTRUCTION EQUIPMENT LOAN STARTS @ 8.90% P.A ONWARDS. Compare interest rates and check more deals offered on a loan for machinery purchase by our financial partners at Loanz360 in 2022.
Bank Name | Interest Rate (P.A) |
HDFC | 10.00% onwards |
Fullerton India | 13.00% |
Bank Of Baroda | 9.35% |
Axis Bank | 10.25% |
Bajaj Finserv | 17.00% |
RBL Bank | 17.50% |
Tata Capital | 19.00% |
Hero Fincorp | 12.00% |
Kotak Mahindra | 8.90% |
DHFL | Custom |
ICICI Bank | Custom |
Shriram City | 15.00% |
Ziploan | 23% |
Note: Our financial partners are not limited to the above-mentioned banks. Contact Loanz360 to discuss options. The interest rates may vary subject to conditions.
FAQ
What is a construction equipment loan?
As the name suggests, this type of loan is meant for businesses that require financing for the purchase of new equipment. The loan amount is determined based on the value of the equipment being purchased.
Who need machinery loan?
For businesses looking to take their operations to the next level, a machinery loan can be a great way to finance the purchase of new equipment. Not only does this help to free up capital that can be used for other purposes, but it also allows businesses to take advantage of the latest technology and innovations without having to worry about the upfront cost.
Is it easy to acquire machinery loan?
A loan for machinery purchase is relatively easy to acquire, making it a great option for business owners who are looking for ways to finance their company’s expansion.
Can I get loan on old machinery?
Yes. You could potentially get a machinery loan of up to two cr. These loans could provide you with high working capital whenever needed and are collateral-free.Â
Can I get machinery loan on an asset?
If you’re looking to finance some new machinery, you don’t necessarily need to provide collateral. The equipment itself can be used as security for the loan.
How much can I get on the construction equipment?
Most banks or lenders offer a machinery loan of up to 80% to 90% of the market value of the equipment required to ensure the financial growth of a business. This way, businesses can have the much-needed resources without breaking the bank.
What are the interest rates on a loan for machinery purchase?
The interest rates on a construction equipment loan vary from bank to bank. However, most banks have lower interest rates on a loan for machinery purchase, some even as low as 6%. Contact our representative at Loanz360 to get the best deals on your loan at lower interest rates.
What is the difference between machinery and plant?
The defining characteristic of machinery (machinery is designed to perform a specific task or set of tasks) is that it contains moving parts, while plant (plant is merely any equipment that is used for a business purpose) does not. However, computers and other electronic devices are usually considered to be machinery even though they have no moving parts. This is because they are essential to the functioning of many businesses today.
Can I get 100% financing on the equipment?
Yes. You can get 100% financing on the equipment or wish to pay a down payment on the loan. However, on average, most lenders offer 80% to 90% financing on the invoice value. Check with a particular lender or a marketplace to know more information on the funding policy.
Are there any subsidies on the machinery loan?
Yes. There are a few government-initiated schemes for borrowers looking to invest in a machinery loan. Schemes such as CLCSS, SIDBI, etc. allow funding for technological upgrades for business owners, entities, or entrepreneurs.
Can I lease the equipment on loan borrowed?
Yes. There are no end-use restrictions on loans. You may lease or purchase the machinery as you wish.
What is the repayment tenor on heavy equipment loans?
Most banks and lenders may allow a repayment tenor of 3 – 7 years on the loan. However, under special conditions, the lender may extend the period up to 10 years depending on a wide range of key factors, from creditworthiness to business stability.
