All businesses need human resources, capital and physical resources for expansion. Additionally, the need for external financing may arise when businesses have to buy expensive machinery essential for daily operations, expansion, etc.
That is why several lending corporations offer machinery loans without security to facilitate big equipment for expansion. Before acquiring such credit, it is crucial to assess the advantages of the same.
What are the benefits of a machinery loan without security?
Here are some of the advantages of such loans-
- No hassle of arranging collateral or guarantor
An individual does not need to find a guarantor or pledge any asset as collateral to avail machinery loan. The equipment itself acts as a form of security. The tenor or term of this sort of business loan relies upon the machinery’s life span.
The financial strength of a business determines such a loan’s interest rate. Moreover, the loan policies are explicit and have no hidden charges, due to which one can rest assured.
- Lump sum amount of credit
Financial corporations offer a substantial machinery loan to ensure smooth production without any roadblocks. Business owners can use this amount either to purchase new equipment or to reform the existing setup.
- Instant funds for business
At times, a business may go through financial turmoil and cannot afford any delay for urgent funding. Owners can opt for a machinery loan without security for instant financial help. It offers a faster disbursal than other products. After approval, the money directly goes to the bank account within a day or two. Besides, instant funding of this sort helps to save on the business capital.
- Flexi loan option
One can easily manage his or her business finances with a Flexi loan; with this feature, a borrower can use a machinery loan as per his or her terms. The most important quality of this product is the borrower is liable to bear the machinery loan interest rate on the amount he or she has used only. Also, one can choose to repay interest only EMIs for the initial tenor. Therefore, with a Flexi loan, withdrawing and refunding the tenor is such an easy task.
- Benefits of pre-approved offers
A business may require funds for repairing equipment or for purchasing a new one to scale up production. In this case, a prospective borrower can apply for a loan to an existing lending organisation and opt for credit on a pre-approved basis. This cuts down the application process, and the loan amount gets disbursed quickly. One only needs a few additional documents to avail the benefits.
Reputed NBFCs like Bajaj Finserv extends exciting pre-approved offers for their existing customers on services like business loan, personal loan, etc. To check your pre-approved offers, enter your name and contact details.
- Enjoy tax benefits
The Government of India has implemented several tax benefits for few business loans. One can enjoy a tax deduction on the machinery loan interest rate. Nevertheless, the same does not go for the principal amount. However, there will be a reduction in the total taxable income, and thus the actual tax amount decreases.
- Online access
Several lending institutions have set up their online presence for machinery loan application. One can avail the service online from anywhere to save time.
Buying high tech machinery for better productivity is a costly affair. Therefore, the machinery loan without security is a probable solution to purchase equipment that provides a competitive edge. Additionally, many lenders offer this service at an affordable interest rate after determining the applicant’s business profile, profits, and requirements.
The above-listed pointers are just some benefits of machinery loans. Credits similar to this can also aid in other aspects of your business.