Equipment and Machinery Loan Terms
A machinery loan or equipment loan is a type of secured loan that allows businesses to purchase or upgrade machinery, equipment, or tools. The equipment being financed typically serves as collateral for the loan. Machinery loans are particularly useful for MSMEs that may not have the necessary funds to purchase expensive machinery outright but need the equipment to increase productivity and improve their competitive edge.
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What are the risks of taking a Machinery Loan / Equipment Loan?
When considering an Equipment or Machinery loan, borrowers should be aware of common risks such as depreciation of the machinery, obsolescence, maintenance expenses, and the possibility of default. Prior to borrowing, it is crucial to assess the value and usefulness of the equipment to make an informed decision.
To determine if a Machinery Loan is suitable for your business funding needs, consider factors such as your equipment requirements, cost-effectiveness, the anticipated returns, and your businesses’ repayment capacity. Consider the long-term benefits the Machinery Loan, the impact the loan interest rate will have on operations, and whether it aligns it with your overall business strategy and financial goals before making your final decision.
If you’re over 23 years old, your enterprise is registered with a business vintage of at least 3 years, and your annual turnover is at least ₹12 lakh, then you should be eligible to apply for a Machinery / Equipment Loan via CreditEnable.
If you are unable to repay a machinery loan for MSMEs, it can lead to various consequences. The lender may initiate recovery actions, such as seizing the machinery, filing a lawsuit, or reporting defaults to credit bureaus, which can negatively impact your credit rating and future borrowing prospects. However, you can avoid such outcomes by establishing a good relationship with your lender at the start of your loan. The more communicative and transparent you are with the lender, the more likely they are to work with you to find a solution in the case of a Machinery Loan default.
Yes, we do a soft pull of your Experian Credit Report when checking your eligibility for a Machinery Loan for MSMEs. This credit check is free, has no impact on your credit score, and we even send you a copy of your report so you know how healthy your credit is. It helps the lender determine what Machinery Loan interest rate and other loan terms to offer you.
We simplify the process of applying for a Machinery Loan by eliminating the need to search and compare business loan products. We custom match you with an Equipment/Machinery Loan lender in hours to ensure you get your funding within 3-7 days. Our convenient process, guided by our Credit Experts, offers you access to 100+ products from 35+ lenders. We prioritize affordability and negotiate the best Machinery Loan interest rates and terms, making it both convenient and affordable for you.