Growing Your Business With Machinery Loan—It Is Easy!

Upgrading old commercial equipment or replacing them with advanced machinery is essential for small businesses to grow and operate safely and efficiently. Better machines mean greater productivity. Moreover, for businesses to recover from COVID-related losses, they need machines that can adapt to changing customer demands. However, it’s not easy for small businesses to cover the cost of new machines. And this is where machinery loans turn out to be such a blessing. By ensuring efficiency, growth, and improved customer satisfaction, new machines justify their costs. Applying for a machinery loan simply means you are availing all the above benefits and not letting go of growth opportunities.
 
Moreover, these loans can be availed quickly, affordably and easily, given that you satisfy certain basic criteria. Also, with the Indian government announcing numerous measures to support the MSME sector, getting a machinery loan for new businesses to boost productivity, is a simple and prudent decision. 
 
Read on to find out all about these loans and how to apply for them.
 
What exactly is a loan for machinery? 
 
A machinery loan is an unsecured business loan with a higher loan-to-value ratio (can be up to 75 percent) that is extended to manufacturing firms to buy new equipment, repair old parts, or upgrade the existing machinery. Businesses prefer it due to the long and flexible repayment terms, as some financial institutions offer tenures that go up to seven years.
 
Also Read: Growth Strategies for Small Businesses
 
How can a machinery loan help you? 
 
Using new and advanced machinery that enables the business owner to conduct uninterrupted operations can be a long-term money saver for the following reasons:
 
Enhanced productivity
 
This is one of the biggest advantages of taking a machinery loan to get new equipment, as enhanced productivity ensures the maintenance of your reputation in the market due to on-time delivery. Furthermore, the newer machines can go a long way in reducing defects and the turnaround time for projects. Greater productivity will also translate to more sales, which can boost profits. 
 
Versatility and practicality
 
It makes sense to get a machinery loan for business expansion due to the flexibility of schemes that can suit any business. Since this loan type does not need collateral, your assets can be put to productive use. 
 
Sustained cash flow
 
When you are able to ensure that the production takes place ahead of schedule in an efficient and an almost defect-free manner, you can expect your business’s cash flow to be positive consistently. This extra cash can be used to pay your vendors and improve your credit score in the process. 
 
Top-notch production quality in lesser time
 
Although it sounds too good to be true, it is possible to achieve this with the new and enhanced machinery that you buy with the machinery loan. You can deliver your products on time without affecting the supply chain negatively, while also standing out for high quality.
 
Also Read: Small Business Loan - How to Get One?