Machinery Loan without security | Machinery loan in India

Machinery Loan in India

Small and medium scale enterprises (SME) are vital to India’s growth. However, quite often, the lack of a strong capital for them hampers their growth. In fact, many enterprises fall apart as they’re not able to keep up with the big fishes in the industry. The machinery loan is something that acts as a savior for your enterprise. With this, the SMEs get a loan to purchase machinery that can help grow their business by a mile. And if you’re worried about the complications involved, rest assured, getting a machinery loan in India is quite easy.

How to acquire a machinery loan in India?

What is the Machinery Loan?

As the name suggests, a machinery loan is simply a term loan for machinery. Enterprises require machinery to do their tasks at a fast rate while maintaining high quality. However, these state-of-the-art machines required do not come cheap, and most SMEs will not be able to afford it with their budget. Getting a loan particularly for the machinery helps these businesses significantly as they can buy the required tools and equipment that will increase their productivity. These can be obtained for use in any sector, be it construction, manufacturing, etc.

In a lot of cases, you will be able to obtain the machinery loan without collateral. Often, they are granted for any amount and tenure period as per your requirements. This can be 5, 6, or even 7 years. The interest rates for them are moderate and decided on the basis of the CIBIL score of the client.

Features and Objectives

Although the exact features of a machinery loan will depend on the institution or bank granting it, the following are some of the most common things you can look forward to in the loan.

The main objective of the loan is to allow small and medium-scale enterprises to be able to afford tools and other equipment for their use.
Equipment and tools will increase productivity and improve the business significantly, as well as producing high-quality outputs. This reduces cost, time, and energy while generating profit.
The loans under this category are mostly available without the need for any collateral.
You can obtain the loans for various amounts depending on the institution and your requirements. Be it a lakhs or even in crores.
Machinery loans are processed fast and the loans will be accessible in a short period.
These types of loans have flexible repayment options, varying from the granting bank or financial institution.

Eligibility Criteria for Machinery Loan

In order to apply for the loan, you will have to meet certain criteria. Although, this may vary depending on the issuing bank or institution as well. The common machinery loan eligibility criteria are as follows:

Your business will have to be existent for a minimum of 3 years or as required by the financial institution.
CIBIL ratings – Since there isn’t collateral in most cases, you will need a good CIBIL Score.
Company profile – You will need to show your company’s profile, the type of work you do, the vision, product line, your clients, etc.
Age requirements – based on the exact institution, you will have to meet the minimum and maximum age criteria.
Financial records – You will have to prove a steady and genuine cash flow through the company accounts.

How to Apply for a Machinery Loan?

Getting a loan for machinery is fairly straightforward if you can meet the eligibility. Thanks to the number of banks and financial institutions throughout India. Obtaining a machinery loan in Pune, Mumbai, Delhi, and any other city is easy. You can proceed with the following steps.

1. Know your requirements

The first step is to understand what type of machinery you require, how much funding you will need, and other details.

2. Check the eligibility

Check if your company meets the eligibility, and if it doesn’t, meet them before you apply for the loan.

3. Put Forth the proposal

Once you’ve understood the eligibility, submit a proposal for the loan. This must contain information about your company, the machinery you plan on purchasing, the total amount of funds you require, etc.

4. Submit documents

Once the lender has accepted your proposal, you will have to submit the required documents. The authorities will then proceed with the verification and then sanction your loan.

Learn more about machinery loan from FAQs.

Documents required for Machinery Loan:

The following are the machinery loan documents you will need to submit in order to get the loan sanctioned. Apart from the below, there will be additional documentation required depending on the lending institution.

Income documents
Details of any existing loans
Machinery quotation
Adhar card & Pan card
Receipt of GST & VAT registration
Other applicable registration documents
Bank statement receipt
Income tax return

Where to apply for a Machinery Loan?

There are numerous banks and financial institutions in the country today. However, you will need to find one that is reputed and provides machinery loans. Terkar Capital is a top-reputed financial institution in India.We focus on providing our clients with the most beneficial machinery loans. Apart from this, our customer support team will help you understand the entire process as well as the documentation and eligibility related to it. All you have to do is simply contact one of the representatives and begin your loan process.

Machinery Loan