Get Business Loan For Machinery Purchase at Low Rates

During FY 2023-24, India also saw historic growth in industry, where the MSME sector contributed a whopping 30% of the GDP and 50% of export turnover. Highly advanced machinery drives this growth, with SMEs boosting their production volume, raising the level of productivity, and servicing increasing market requirements. It's a costly endeavor to purchase such high-tech equipment, though, and the Machinery Loan for MSMEs has become an essential financial product.

Purchasing machines is a business strategy to fulfill bulk orders quickly. Without machines, SMEs may not be able to meet production schedules on time, injuring their image and profitability. Equipment loan for a manufacturing business will give businesses funds to expand their output capacity.

Why Machinery Loan for MSMEs?

Businesses must spend money on machinery to enhance productivity, quality control, and operational efficiency. That is why equipment financing for small businesses truly makes an impact:

1. Enhanced Production Capacity: New machines allow businesses to increase operations within budget, accommodating expanding customer requirements.
2. Better Quality Products: Advanced equipment enhances accuracy and consistency, allowing for the best product quality.
3. Long-Term Cost Savings: Although machine investment is a one-time capital outlay, it does away with most of the labor cost and wastage.
4. Market Competitiveness: Mechanised operations enable businesses to outpace their competitors not just in terms of speed but also in terms of product quality.
5. Improved Compliance with Industry Rules: Future-proof machines enable businesses to comply with regulatory rules and enforce safety rules.

Different Types of Machinery Loans for MSMEs

There are different equipment loans for manufacturing businesses to invest in:

1. Term Loans to Purchase Machinery

• Fixed tenure of repayment (12-60 months)
• Most appropriate to purchase heavy machinery or more than one machine
• Interest rates are determined by credit history and business turnover

2. Working Capital Loan to Purchase Machinery

• Used to fund working capital for machinery purchase, short-term needs.
• Most appropriate to fund maintenance, repair, and operational costs.
• Use a revolving credit facility for businesses having irregular cash flows.

3. Manufacturing Business Equipment Loan for Manufacturing Business

• To buy or lease new or used equipment.
• Flexible repayment and low interest rate.
• Unsecured or collateral facilities as per the business credit record.

4. Small Business Equipment Financing

• The loan value is based on the machine's value.
• Secured commonly against the machinery to be bought.
• Facilitates technological upgrading without using working capital.