How to Get a Machinery Loan

Financial institutions worldwide offer different types of loans like home loans, car loans, education loans and business loans. A business loan can incorporate several subcategories, out of which a machinery loan is a prominent candidate. A machinery loan entails acquiring finances for buying equipment and machinery required for a business. It helps startups, entrepreneurs and business owners expand their production by purchasing advanced machinery. This, in turn, results in higher profits based on improved sales. 

Machines and equipment are assets for any business. If you are looking to purchase facilities for your business, you should acquaint yourself with how to get loan for machinery. Keep reading to understand the inner workings of machinery-related loans.

Eligibility Criteria for Machinery Loan

To apply for a machinery loan and receive approval, a few essential criteria must be fulfilled. 
   

1. Firstly the applicant should be between 21 years to 64 years of age. This is in regard to the time when the loan will mature.
2. The business in question should be at least 2 years old. This ensures viability.
3. There should not be any discrepancy in previous loans or credit card payments. 
4. It is beneficial to have a good credit score, preferably above 700 and a seamless payment history. 
5. The applicant should have an updated Income Tax Return statement for the past two years.
6. It is also required to have a bank statement of the previous year.
Certain credit portals allow you to check your eligibility through dedicated online calculators.

Documents Required For Machinery Loan

To know how to get machinery, it is also vital to know the documents to keep handy during the time of application. The documents required depend on the type of business and even their availability. In special cases, additional documents might be requested besides the ones listed.  
   

1. Business Validity Proof - An applicant has to keep a certificate of practice that highlights the character of the business. This certificate stands as legal proof of the business' authenticity. It also allows the loan giver to understand why a loan is needed and how it can benefit the business. 
2. Previous Accounts - Previous accounts dating back to three years should be presented. This reflects the revenue earned by the business and its credibility for loan repayment.
3. Proof of Residence - Address proof for the office or business should be attached to other documents while applying. Any document bearing an affiliation of the company address, like the company PAN, will work. 
4. KYC Documents - KYC documents of the applicants are needed. These can be PAN, Aadhaar, driver’s licence,  Voter ID card or Electricity bills.
5. Photograph - A recent passport-size photo of the applicant should be provided. 
6. Income Tax return statements and bank statements are also required.

Steps to Appy for Machinery Loan - Online & Offline

To know how to get a machinery loan a few simple steps should be followed. Machinery loans can be applied for in both online and offline modes, with each having distinct processes. 

Online Process
1. Visit the official website of the bank or lender
2. In the loan application form fill in your details and submit it
3. Upload all the required documents and photographs and submit them.
4. Expect a call from a bank representative post-submission. This will ensure further progress. 
5. Once the application is approved and documents are verified, the loan will be approved within a specified time.
6. The loaned amount will be shown in the mentioned account post-loan approval

Offline Process
1. For offline loan applications, you should visit the bank or lender's office. 
2. Carry the filled-out form and required documents.
3. After submission, the bank representative will communicate regarding further procedures.
4. Upon approval, the bank will shell out the amount in the mentioned bank account.

Benefits of Machinery loan

In addition to knowing how to get machinery loan, it is also important to understand its benefits. As a business owner, it is essential to keep growing your production and sales. It is also imperative to adopt modern equipment and techniques to stand out amidst competition. Irrespective of the nature and size of the business, growth and progress should be the motto. 

However, procuring new equipment can often appear daunting due to expenses. Many small business owners opt out of such purchases for lack of sufficient funds. Machinery loan is the solution for all these issues. A machinery loan offers finance for the purchase of equipment and machinery. Besides refurbishment, it also assists in repairing damaged facilities. Machinery loans offer flexible EMI options catered to your needs. It is a boon for startups and new organisations.

Final Verdict

In a highly competitive market, upgradation is the key to success. With the help of machinery loans, a business can opt for much-needed additions and facilities that can boost productivity. This ultimately leads to enhanced profit margins. Different banks and lenders offer machinery loans. Once you have familiarised yourself with the details on how to get loan for machinery,  begin searching for an appropriate lender. Settle a payment plan that suits your needs, submit all documents, follow the guidelines and enjoy the perks of novel equipment for your business.