Heavy machinery is prone to depreciation, which not only starts to hamper their efficiency but also reduce the firm’s productivity significantly. This is why heavy machinery needs to be replaced frequently to keep business operations smooth and optimal.
As replacing expensive equipment frequently may not be financially feasible for small and medium business owners, availing an unsecured machinery loan can prove effective in such situations. Additionally, such loan option does not require applicants to provide any security or collateral to avail it.
The below details the steps to avail a machinery loan without security –
1. Check the eligibility criteria
Before applying for any business loan, it is vital that individuals find out if they fulfil the eligibility criteria set by a financial institution. For instance, individuals who fulfil the following are deemed eligible to apply for a machinery loan without security –
Applicants who are between 25 years to 55 years of age.
Have a business that is at least 3 years old.
Possess a clear record of filing income tax returns on time.
Conversely, different financial institutions may require applicants to fulfil other criteria as well. They must make it a point to check the same from their preferred lender to clear all confusions in advance.
2. Check the rate of interest and other fees
Individuals must find out the rate of interest levied against a said machinery shop loan before applying for the same. Similarly, it is also vital that they find out about the other fees that are associated with such loan options.
Such information not only comes handy for calculating their estimated EMI but also helps them to compare different loan options for selecting the most profitable one. Individuals can also learn to use a business loan EMI calculator to figure out the same more conveniently.
3. Compare features and benefits
Several business loan products are being extended by financial institutions to help business owners upgrade and expand their organisation. This offers individuals enough options to choose one for their requirement.
To ensure the same, individuals should not base their decision entirely on the loan’s interest rate. Individuals should also take into consideration the features and benefits extended by the loan option.
4. Collect the documents required
After selecting a suitable loan option, individuals must collect the documents that are deemed essential to apply for it. Generally, applicants are required to furnish KYC documents, proof of business existence, latest bank statement and other vital proof of income that are deemed essential for availing this loan.
It should also be noted that financial institutions may require applicants to furnish other documents as well. To be better equipped for a machinery loan, applicants should find out about the documents in advance to facilitate the application process.
5. Apply for the loan
The loan application process remains one of the most commonly asked questions about business loans. Several financial institutions extend the facility to apply for the loan online.
Generally, individuals are required to visit the online website of their choice of a financial institution to fill up an application form online.
By simply providing the essential details and submitting all the required documents individuals can complete the application process.
To ensure quick disbursement of the loan value, individuals should opt for a financial institution like Bajaj Finserv, whose loan application and verification process are streamlined and convenient.
By availing a machinery shop loan, individuals can not only upgrade their firm’s existing machinery but can also improve the quality of production significantly. Lastly, it can be said that to avail a machinery loan without security, individuals need to follow all the steps mentioned above.