Equipment loans have emerged as a vital financial instrument for modern businesses. By providing funds to invest in modern machinery, it helps a business to stay technologically competent. These loans are tailor-made to address two critical aspects of a business: machinery and cash flow.
A steady cash flow helps a business grow in the marketplace. It helps in business expansion and also aids in mitigating the effects of liquidity crunch.
Let's understand how an equipment machinery loan helps in enhancing cash flow.
Positive impact
Buying more efficient machinery
Modern businesses bank on shorter production cycles with increased efficiency. This improves the quality of service offerings, which adds to the goodwill of a business. An equipment loan can be used to buy efficient machines that:
- Consume less energy
- Make effective use of raw materials
- Boost productivity
- Can work for long hours without breakdown
Such machines help in saving running cost, which helps in improving cash flow to a large extent. Companies like Bajaj Finserv offers equipment loans as high as up to Rs. 80 lakh so that businesses can purchase the best technologies available.
Leasing
Businesses can also use an equipment loan to lease equipment. For example, seasonal agriculture-based industries can lease required machinery during the harvesting season.
Leasing saves businesses the cost of owning and maintaining machines on a permanent basis. This can use these savings in other areas of business to boost revenue.
Maintenance
Maintenance is a key aspect of seamless performance. Machines, both heavy and light, undergo constant wear and tear. Hence, it's imperative to maintain them in top condition for best performance. A major breakdown may result in huge loss for a company.
Businesses can avail loans to buy high value spare parts and consumables for the maintenance of machines. It helps in saving cost by eliminating equipment downtime and machine inefficiencies.
Additional read: 5 benefits of machinery loans
Automation
Automation is an intelligent approach to cost reduction and containment. It is the modern approach to business. In a competitive landscape, businesses should leverage automation to enhance productivity and effectiveness. Cloud computing and technological advancement have boosted automation. Enterprises can avail equipment loan to install automation in their operation. This helps them save cost on continuing human operators on its payroll.
Business Flexi loan facility
While taking a loan, it is important that the funds availed must not sit idle. Through a Flexi loan facility, businesses can utilise the funds as when required.
The Flexi loan facility offered by lenders like Bajaj Finserv allows the business owners to withdraw and repay funds per their requirement. This is beneficial as it matches with the cash flow of the business. So while such Flexi loan facility prevents the idling away of funds, it also avoids any unnecessary pressure on the financial resources of the borrower.
For Bajaj Finserv, the documentation process for an equipment loan is simple. This is to help businesses save on the administrative costs of borrowing. The documents required for our machinery loan are:
- Passport-size photograph
- KYC documents
- Certificate of business establishment
- Audited turnover of previous year
- Bank account statement of at least 2 previous months
Our doorstep service makes the entire loan application process more convenient. Talk to our loan experts today to know more.
Understanding the technological aspects of a venture is the key aspect of making the most out of equipment loan. To achieve their goals, businesses must match their financing option with the right technology. A careful study makes the entire loan-borrowing exercise smooth and hassle-free.
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