Get the Tata Capital App to apply for Loans & manage your account. Download Now


Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required

Tata Capital > Blog > Equipment Finance > How Equipment finance opens up new avenues for small businesses?

Equipment Finance

How Equipment finance opens up new avenues for small businesses?

How Equipment finance opens up new avenues for small businesses?

State-of-the-art equipment lays a solid foundation for business growth and enhanced productivity. Every business understands the significance of keeping pace with the latest technological developments to stay ahead of the curve. 

Businesses need large sums of capital reserves to purchase, maintain, and upgrade expensive equipment; a constant source of funds is essential. However, small businesses with limited reserves fail to secure credit and find it challenging to invest in high-tech equipment.

Equipment financing is a lucrative option for small businesses to avoid technological obsolescence, fund large capital investments, and ease working capital to meet daily operations. Equipment finance refers to financing business equipment through loans or leases.

Equipment loans and equipment leasing

Equipment loans empower businesses to outrightly purchase the equipment in exchange for monthly principal and interest repayment. Under loan financing, companies are responsible for the upkeep and maintenance of equipment. On the other hand, leasing is a financing option wherein the lessor leases equipment for a predetermined tenure in lieu of lease rentals.

Equipment financing is a viable and cost-effective solution for all businesses operating in India. Here's are five ways equipment financing opens up more options for small businesses:

1. Diversify product offerings

Launching new products enable businesses to generate revenue and increase profitability. Meeting the ever-changing customer requirements with new products can help enterprises outpace the competition and flourish.

Equipment finance enables businesses to make substantial capital investments in manufacturing new product offerings without hampering the current cash flow position of the company. In equipment financing through loans or leases, equipment cost is spread across the predetermined tenure as monthly EMIs or lease rentals. With cash-in-hand, businesses can expand their current operations or diversify their product range to scale up business growth. 

Reach out to Tata Capital Experts to get best-in-class equipment loans or leases and invest in the company's future by diversifying into a new range of products.  

Additional Read – 5 Myths about Equipment Leasing busted

equipment financing for small business

2. Expansion of Business

Every business looks for better opportunities, and entering new geographical boundaries is an efficient way to grow. However, it is crucial to have a better understanding of the current financial position of the company. Lack of funds can jeopardise the current state of business operations.

Equipment financing is an attractive source of financing to support business expansion. It enables businesses to invest in machinery, computers, laptops and help companies to expand their footprint. It accelerates business growth, creates new avenues for revenue generation and support businesses to compete in the global market.   

3. Enhance business efficiency

New age equipment with the latest technologies is imperative to enhance business performance. Equipment financing allows businesses to purchase or lease high-tech equipment without an upfront capital investment. Companies can choose specific machinery to improve product quality and produce more in less time. It will also help increase sales, improve market share, and generate goodwill in the market.

Tata Capital has a wide range of loan or lease offerings that can be curated to suit the business requirements. Reach out to Tata Capital experts for the best equipment financing options and enhance business efficiency.

4. Improve profit margins and reinvest in the business  

Every business understands the significance of generating profits to survive the onslaught of challenges thrown by unprecedented circumstances. Also, reinvestment of earnings in a business can fuel business growth.

On this front, Equipment financing can help businesses invest in new-age machinery without a massive strain on the company's cash flows. Companies can leverage the latest technologies to reduce costs and enhance the company's profitability. These profits can be reinvested in the business to elevate its growth.

Additional Read – Does Credit Score really matter when it comes to leasing equipment?

5. Tax Savings

Equipment financing generates tax savings for small businesses. Equipment financed through loans enables business owners to claim a deduction of interest and depreciation on the asset acquired. 

On the other hand, leases offer several tax benefits to businesses. Lease rents are tax-deductible and reduce the overall taxable income. These tax savings can be further invested in the company to increase profitability.

Technology is changing rapidly, and it is inevitable for businesses to use high-tech equipment to sustain themselves in this ever-evolving competitive market. Equipment financing is an efficient tool to access new-age equipment while conserving the business's cash reserves. Enterprises can utilise the ample cash reserves of the company to diversify into new products, expand the business, improve efficiency, expand profit margins and generate tax savings. 

Reach out to Tata Capital to get the best equipment financing solutions with minimal documentation, attractive interest rates, flexible repayment terms and tenure.

Leave a Reply

Your email address will not be published. Required fields are marked *