Machinery Loan
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Loan Experts is committed to provide the world class financial services among itscustomers. We are serving our renowned associate Bankers and valuable customers forlast 15 years.
Sachin Vashishth
(Managing Director)
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- +91-9810454531
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A machinery loan is a type of business loan specifically designed to help businesses purchase new or upgrade existing machinery and equipment. These loans are often offered by banks and financial institutions to support businesses in industries such as manufacturing, construction, agriculture, and other sectors that rely heavily on machinery for their operations.
Key Features of a Machinery Loan:
Purpose:
- 1. To finance the purchase of new machinery, equipment, or technology.
- 2. To upgrade or replace old machinery to improve efficiency and productivity.
- 3. Can also be used for related expenses like installation, maintenance, and transportation of machinery.
Eligibility Criteria:
- 1. Business Type: Manufacturing, trading, or service enterprises.
- 2. Business Age: Generally, the business should be operational for at least 2-3 years.
- 3. Credit Score: A good credit score (700 or above) is usually required.
- 4. Turnover: The business should have a stable turnover and profitability.
- 1. The loan amount can vary based on the size of the business, its financials, and the value of the machinery. It typically ranges from ₹10 lakhs to ₹10 crores or more.
- 2. Some banks may offer up to 90-100% of the machinery cost.
- 1. Interest rates for machinery loans usually start from 8.5% to 12% per annum, depending on the bank and the borrower’s creditworthiness.
- 2. Rates may be linked to the bank’s Marginal Cost of Funds based Lending Rate (MCLR) or External Benchmark Lending Rate (EBLR).
- 1. The repayment tenure typically ranges from 3 to 7 years, with some banks offering up to 10 years.
- 2. The tenure may vary depending on the type of machinery and the loan amount.
- 1. The machinery being financed usually serves as the primary collateral.
- 2. Additional security, such as the personal guarantee of promoters or other assets, may be required.
- 1. Processing fees generally range from 0.5% to 2% of the loan amount.
- 2. Some banks may offer concessions or waive processing fees for specific schemes.
- Document Submission:
- 1. Financial statements (balance sheet, profit & loss account).
- 2. KYC documents of the business and promoters.
- 3. Bank statements for the last 6-12 months.
- 4. Quotation or invoice for the machinery to be purchased.
- 5. Business plan or project report
- Loan Assessment:
- 1. The bank will assess the business’s financial health, repayment capacity, and the value of the machinery.
- 2. Credit appraisal may include a site visit and evaluation of the business.
- Sanctioning & Disbursement:
- 1. Upon approval, the loan is sanctioned, and the amount is disbursed, usually directly to the machinery supplier.
Benefits of a Machinery Loan:
- 1. Increased Efficiency: Helps businesses acquire advanced machinery, leading to higher productivity.
- 2. Cost-Effective: By spreading the cost of machinery over time, businesses can manage their cash flow better.
- 3. Tax Benefits: Interest paid on machinery loans is often tax-deductible, reducing the overall cost of the loan.
- 4. Growth Potential: Access to the latest technology can give businesses a competitive edge.
About Us
Loan Experts is committed to provide the world class financial services among itscustomers. We are serving our renowned associate Bankers and valuable customers forlast 15 years.
Sachin Vashishth
(Managing Director)
Contact Info
- +91-9810454531
- Projectfinancer@yahoo.co.in