By admin | September 9, 2021
If you are a small business owner, you know how important it is to upgrade your machinery from time to time in order to stay updated with the market trends. That is where a small machine loan comes into play.
What is a small machine loan?
Small machine loan or small equipment loan helps small and medium sized businesses secure necessary funding to get machinery or equipment required to upscale their business processes and production. Through the small equipment loan, you can buy new or used small machinery, tools, and industrial equipment.
Here are 6 steps to apply for a machine loan:
- The first step is to ensure you qualify for a small equipment loan. There are certain requirements that must be met in order to qualify. Each lender requirements vary, so whichever lender you choose, make sure you meet the minimum requirements.
- Once you have gone through the requirements of the lenders, choose a lender that best suits your business needs.
- A business plan is incredibly necessary in order to be considered for equipment financing. A business plan describes the scope of your current business as well as a detailed proposal for growth of the business. The objective behind this is to give the lenders a summary of your business to be better qualified for the loan. The number of years you have been in business and the annual revenue is also an important factor lenders consider when determining whether to accept or reject your loan application.
- To solidify your application, a detailed overview of your annual revenue must be included in the business plan. A revenue and loss statement gives lenders an idea of the cash inflows and outflows; helping them determine the overall financial position of your business.
- The respective lenders might also require a statement of your personal finances. It is necessary to ensure all your documents are in place when applying for equipment financing to better streamline the process.
- Probably the most important factor when applying for any loan is your credit score. The higher your score, the more likely you are to be considered for a small machine loan. Check your credit score online before filling out your application.
To improve your chances of getting equipment financing, ensure that you have a satisfactory track record, business vintage of over 3 years, adequate monthly cash flow to serve EMI, and at least one self-owned property.
Apply for a small machine loan through EFL and avail our unique features such as:
- Maximum loan amount upto 75% of the price of equipment or Rs. 3cr (whichever is lower).
- Loan term upto 5 years.
- Flexible interest rate based on customer profile.
- Loan disbursement within 7 days.
- No additional collateral required.
Thus, small machine loans are an effective way to not only increase your performance but also stay up to date with trends in your respective industry.