Business Loan for Machinery Purchase
When it comes to setting up an enterprise, there are a lot of prerequisites that you need to consider. Depending on the type of business, one of the most essential requirements after capital is machinery. At times, the machinery can be quite expensive. It may not fit in the budget. It has been set for the establishment of the project. So, in such cases, a machinery loan is an exemplary solution.
Getting a loan to purchase machinery in India has to meet several criteria. There are different kinds as per requirements.
What is Machinery Loan?
A Machinery loan is a loan to purchase industrial machinery. It is generally granted to SMEs. The loan requirements will also differ from borrower to borrower. The range varies from about 25 lakhs to any amount you need.
Tenure can also vary accordingly. It can be from 5 years to 7 or 8 years. It differs as per the customer. Machinery loan interest rates in India are generally moderate as well. Since it is the private institutions that render these loans.
Here’s a guide to avail of machinery loans without security.
How to get a loan for machinery in India?
Every application process has specific requirements you need to meet. These requirements, along with the steps and documents needed, can vary depending on the program or opportunity.
To help you navigate this, here are some key things to keep in mind.
1. Know your requirement
The process to follow depends on the requirements of the firm. This includes, what kind of machinery is purchased. Whether the machine is to be repaired or replaced or any other requirement. Thus, the loan amount and the tenure period will depend on these requisites.
2. Understand the eligibility criteria
After knowing the requirements, the next thing that matters is the eligibility for acquiring a loan for machinery. So, as mentioned earlier, it is extremely important to meet these criteria. So, to know the eligibility, a professional can be consulted to know what is a suitable loan as per the requirement.
3. Put forth a proposal
We understand the eligibility criteria and other prerequisites. We draft a proposal for the loan. It must contain the details about the machinery, the firm, the applicant, and the required amount. There is other information that has to be mentioned as well. It can be better known from a professional consultant.
4. Fulfil the document requirements
Once the proposal has been accepted by the lender, the document has to submit. The list of documents may differ from case to case. So, this can be known only after the approval of the proposal.
Learn how to get a loan for machinery from the case study.
Documents required:
The documents are bound to differ as per the case. Although, there are certain common requirements. These are as follows:
KYC Documents
- KYC Documents of borrower and co-applicants.
- Aadhar Card
- PAN Card
Statutory documents
A. Proprietary Firm:
- Shop Act
- GST Registration Certificate
- Udyog Aadhaar Memorandum
- VAT Registration
- GST certificate
- Other applicable Registration documents.
B. Private / Public Limited Company or One Person Company:
- MOA & AOA
- Certificate of Incorporation
- Certificate of commencement of business
- GST Registration Certificate
- Shop Act
- Udyog Aadhaar Memorandum
- VAT Registration
- Other applicable Registration documents
C. Partnership Firm:
Registered Partnership Deed
D. In Case of LLP:
- LLP Agreement
- Shop Act
- Udyog Aadhaar Memorandum
- GST Registration Certificate
- VAT Registration
- Other applicable Registration documents.
Income Documents
- Last 3 years Financials
- IT Returns
- Computation Sheet & Balance-sheet
- Proof of turnover vide latest sales/service tax returns and Purchase Order Copy (for Loan against receivables)
- Last 1-year bank statement of an operative bank account.
- Details of all existing Loans:
- Sanction Letter
- Loan Account Statement for the last 1 year.
- Last 3 years Financials
Machinery loan documents
- Tax Invoice Copy of the Equipment / Machinery Purchased.
- Proforma Invoice / Quotation of the Machinery to be purchased.
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Machinery Loan at Terkar Capital
Acquiring a business loan for machinery purchase is a lengthy process. It requires patience and an understanding of complicated procedures. It comprises the loan sanctioning process. However, this can be made simpler with some assistance.
At Terkar Capital, we have the best customer support. The client is of priority to us. We do more than just sanction or benefitting machinery loans. We ensure the client understands the loan process and provides all other kinds of assistance.
I am already having the full setup for manufacturing uPVC windows and doors profiles except dies. Present I require funding for dies. I am already in uPVC windows and doors fabrication.
Dear Sir,
Thank you for sharing the requirement in detail. Definitely we can fund to Purchase the dies. Our experts team will contact you on a given email ID shortly. So we will discuss this and will be glad to take this ahead.
Thank You.
Best Regards
Team – Terkar Capital