A business needs finance for various purposes. For example, a startup business needs funds to set up operations, a small business needs funds for working capital and cash-flow, a medium business needs funds for buying machinery and a large business may need funds for even larger capital purchases. However, the fact remains that while it is easier for larger, established businesses to raise loans for capital expenditure, the same is not true for small and medium businesses looking for institutional finance in India.
Especially, quick finance for buying machinery remains elusive for most SMEs looking for unsecured business loans. On the other hand, the small nature of these financial entities means that their owners cannot afford to collateralize their meagre holdings in lieu of a business loan. Hence, the production and quality of products suffer, giving an obvious setback to the government’s ‘Make in India’ policy.
Another disadvantage posed by a lack of machinery loans in India is that the SME sector which contributes almost 45% to the country’s GDP is under-equipped to meet the challenge from foreign competitors. This, in turn, also has an impact on our country’s trade deficit with nations like China.
But, things are changing fast in the Indian financial lending market, with non-banking financial companies taking up the mantle of providing institutional finance for micro, small and medium enterprises of the country.
Indian NBFCs, like Lendingkart Finance, are offering unsecured business loans to small and medium business owners for buying machinery, stabilizing working capital and meeting other short-term goals and objectives. However, let us focus on the main topic of today’s discussion, i.e. machinery loans or equipment finance.
How equipment finance helps MSMEs in staying competitive?
- Upgraded technology means there is less wastage of raw materials as new machinery is more efficient in the use of materials and power.
- Newer technology also reduces the risk of spoilage and improves the quality of products being manufactured.
- Machinery also allows MSMEs to reduce redundant jobs and employ more highly-skilled workers, thus boosting industrial output as a whole.
- With more savings in operations, a small or medium enterprise earns more profits.
- As the income to expenditure ratio increases, the SME owner is able to invest more capital in business growth and expansion to new markets.
Getting a business loan for machinery from Lendingkart
Lendingkart offers unsecured business loans up to ₹ 2 crores. The repayment window for these loans ranges 6 months to 24 months, giving a business enough time to service the debt. Here are the salient features of a machinery business loan from Lendingkart.
- Ticket size of up to ₹ 2 crores repayable in 6 to 24 months’ time.
- Highly competitive interest rates that are determined through business analytics.
- Online-only application process with easy documents upload and verification.
- Quick turnaround time of 3 working days (72 hours) for approved applications.
- Very low processing fees (1 to 2 per cent) as opposed to banks and other lenders.
- Flexible repayment options such as monthly EMIs or bi-weekly payments.
- Zero prepayment charges for those who wish to repay the loan early.
To apply for a business loan online, visit www.lendingkart.com today and sign up for a free loan account. You can also download the Lendingkart App on your Android smartphone to apply.