Technology is both an encouraging factor and a dire requirement for the growth and development of your business. If you have recently started a small or medium-sized enterprise, you might be looking for new machines, better computers, advanced software, or hardware updates. However, these can be financially troublesome for newly established businesses or those looking to expand quickly.
Realizing the financial problems that hamper the purchase of new machinery for MSMEs, both government banks and NBFCs in India have started offering business loans for machinery purchase. These loans ease the financial pressure of starting or expanding your business.
Before applying for a business loan for machinery purchase, here are a few documentation and eligibility related details that you must be familiar with.
The primary documents required for machinery loan are:
- Proof of identity of the business owner such as pan card, passport etc. If the business is a partnership, these identities will be required from all the partners.
- Proof of address of the proprietor or all the partners of the business. The proof of address can be documents such as passport, driving license, Aadhar card etc.
- Latest colour photograph of the business owner or partners.
- KYC documents of all the partners or owner of the business. Sometimes, a duly filled KYC form might be requested.
- Proof of Income, including the bank statement of the past six months or one year of business for which the machinery loan is taken.
- Existing facility sanction letter.
- Original and valid quotation price of the machine that is to be purchased using machinery loan finance.
Other than this, the documents required for machinery loan can vary for different lending institutions. Get in touch with your chosen lending institution to get exact details of the documents required.
The following eligibility rules apply when you request machinery loan finance from a lending institution:
- At the time of application, the age of the borrower cannot be less than 25 years. Similarly, at the time of maturity, the borrower’s age cannot exceed 65 years.
- While applying for a machinery loan for start-up, you might have to provide the lender with turnover reports. These reports should demonstrate an upward trend.
- The business for which a machinery loan is requested must be profitable for at least three years.
- A registered chartered accountant should have audited your business’s latest balance sheets.
Some lenders might ask for income tax documents to check your eligibility criteria for a machinery loan for a start-up.
If you are looking for a machinery loan for a new business, approach Tata Capital. With our requirement for minimal documentation and our online application facility, we reduce your burden of applying for a machinery loan for a new business. Our interest rates for a loan for machinery purchase start at 19%. We also offer a flexible repayment schedule and complete assistance via chat, call, email, and our website.
To learn more about Tata Capital machinery finance, get in touch today!