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How engineers can improve their cash flow with a machinery loan

  • Highlights

  • Customised loans for machinery purchase

  • Use cash reserves for working capital

  • Reduce inventory to improve cash flow

  • Increase output and business revenue


Regardless of the nature of your engineering business, you are sure to require cash for various expenses associated with machinery like making a purchase, renewing a lease, or maintaining equipment. In such cases, it is better to opt for a machinery loan to pay for these expenses, so that you can reserve company finance for day-to-day expenses.

Here is how you can improve your cash flow with a machinery loan.

 

 

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Dedicate company reserves for working capital

You might consider financing the purchase of new machinery through your company’s cash reserves. But, this is not a good idea as that cash can be better used to finance various working capital expenses such as wages, short-term debts, inventory expenses and more. Any deficit or delay in paying for these expenses can lead to severe cash flow problems. So, for machinery-related expenses, it is better to borrow a customised equipment loan and then repay it affordably by making use of a long tenor.

Additional Read: Benefits of an Engineer Loan from Bajaj Finserv

This will ensure that your cash flow isn’t affected. At the same time, you will be able to increase production using new machinery. Increase the output of your business by using a Loan for Engineers from Bajaj Finserv to purchase new machinery. This loan gives you funds up to Rs.15 lakh at a nominal rate of interest along with quick disbursal.

Increase output to reduce inventory

Purchasing new machinery with a machinery loan will help you utilise your inventory of raw materials much more efficiently. You can increase your output gradually and completely clear your inventory. Not only will this save you maintenance costs for storing inventory, but also help you convert an unproductive asset into something that generates an income. Also, making the most efficient use of your machinery can help you reduce the per-unit cost of whatever you produce.

Additional Read: Tips to improve your chance of getting an Engineer’s Loan

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Meeting demand and generate revenue

Once you achieve a high level of output, you will be able to cater to demand better and benefit from greater sales revenue. Economies of scale will also contribute to greater profits. This revenue will then help you finance various operational expenses and keep your cash flow on track. Besides, it will also come to your aid by giving you funds to repay your loan’s EMIs over the tenor.

These are strategies that will help you finance purchase of new machinery and, at the same time, help solve your cash flow problems. So, why use your important cash reserves to purchase new machinery, when you can use the machinery loan and enjoy multiple benefits?

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The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.

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