Micro, Small, and Medium Enterprises (MSMEs) are the support system of a country’s economy. Especially, because they generate employment, pioneer innovations and empower growth thereby, creating a positive impact on the economy. However, for smaller businesses, access to financing remains a significant challenge. An MSME machinery loan is just the right instrument that helps these small businesses overcome the financial hurdles. So, let’s take an in-depth look at these loans which can fuel your business and take it to new heights.
Understanding MSME Machinery Loans
These types of loans are essential to MSMEs as they provide monetary assistance for purchasing machinery and other apparatus necessary for business operations. It can be used for other purposes too like enhancing the currently available technology or acquiring advanced technology. Moreover, the features associated with machinery loans are more attractive in comparison to traditional loans. The features are as follows:
- Competitive rates of interest: Money lenders usually offer competitive interest rates to businesses as machinery loans have the backing of assets.
- Extended repayment period: The borrower enjoys an extended repayment period which reduces the financial burden on the business.
- Customised repayment plans: Money lenders provide customised plans for repayment against machinery loans.
- Tax exemptions: The interest on machinery loan and depreciation of the machinery are exempted from tax deductions, depending upon your location.
The Role of Machinery in MSMEs
In an ever-changing landscape of MSMEs, advanced machinery plays an important role. The impacts of acquiring new machinery are as follows:
- Increase in efficiency: Modern equipment enhances the efficiency of business operations through task automation which in turn increases the speed of production.
- Assurance of Quality: Advanced machinery enables a business to maintain optimum quality and consistency of a product.
- Cost Effective: A good machinery does not require frequent maintenance and consumes less energy.
- Business Expansion: Machinery has a direct role to play in business expansion. It enables a business to introduce a new product line in the market or to increase the production of already available product.
- Helps in innovation: Advanced technology enables a business to work on innovative ideas to keep you ahead in the game.
How MSME Machinery Loans Can Transform Your Business?
The MSME machinery loan comes with the following advantages:
- Instrumental in growth aspiration: Investing the MSME machinery loan amount at the right equipments enables a business to work towards its growth aspirations.
- Technological edge: Investment on advanced machinery helps a business to stay ahead of its competitor all the time.
- Competitive edge: Better quality product and increased production efficiency helps a business to have a competitive edge over its competitors.
- Enables business expansion: Advanced machinery increases the efficiency of business by scaling up the production process.
- Increase in Revenue: The overall profit of the organisation increases because of the increased productivity.
Why Choose NBFCs for MSME Machinery Loans?
Non-Banking Financial Companies (NBFCs) are pivotal and plays an important role in providing the MSMEs with financial aid. Here are some of the benefits of taking a machinery loan from an NBFC:
- Short Waiting Period: Non-Banking Financial Companies, usually take a short time to process and dispatch loans because of their minimum but efficient documentation process.
- Lenient Eligibility Criteria: NBFCs prefer giving loans to business that has a limited financial history. So, their eligibility criteria is lenient towards Micro Small and Medium sized businesses.
- Customised Loan Terms: NBFCs provide a customised loan and repayment terms to lessen the financial burden of the borrower.
- Expert Opinion: NBFCs, more often than not deals with MSMEs. So the industry-specific guidences coming from an NBFC can prove to be really insightful for MSMEs.
Conclusion:
In essence, MSME machinery loan is the perfect instrument that can take your business to the next level. By investing on advanced machinery, a business can improve its overall efficiency and productivity thereby enhancing the quality and consistency of its product. But it is also important to find the right NBFC, that’ll customise your loan as per your business needs and process your loan faster with minimal documentation. So, if you are looking to upgrade your machinery, consider taking a Msme loan for machinery purchase.
Additional Tips:
- Do an indepth Research: Before finalising on a particular lender, do an in-depth market research and compare the loan offers coming from different lenders and Non-banking financial companies to understand what suits your needs.
- Identify your business needs: Identify the needs of your business and quote your budget accordingly to the lender/NBFC for the best possible deal.
- Maintain good credit history: Make sure that you pay the dues timely so as to maintain a good credit history. It increases the possibility of getting better loan offers in the future.
- Look for industry-specific guidance: Talk to industry experts and advisors and take their opinion to better your business proceedings.
