Equipment finance or loan is a financial product made available to small business owners to assist them in purchasing new or old machinery and equipment. Also known as asset purchase loans, this type of funding is advantageous for small business owners because it is intended to assist SMEs in scaling up their operations.
As a small business owner, you understand the value of having access to the most up-to-date equipment and technologies. Heavy machinery, CNC machines, lathe machines, other vehicles, and medical machines are all among the assets you can purchase. Having the necessary equipment for your business activities can mean the difference between success and failure as a business owner.
Secured vs. Unsecured Equipment Finance
- What is a secured loan?
A secured loan is a loan extended by a financial institution in which an asset serves as collateral or security for the loan. For example, you can use your house, gold, or another asset to obtain the loan amount. In the case of a secured loan, the bank or financial institution issuing the loan will keep the asset's ownership deed until the loan is paid off.
- What is an unsecured loan?
As the name implies, unsecured loans are loans that are not secured by collateral such as land, gold, or other valuables. When a lender makes an unsecured loan available, they do so after evaluating your financial situation and determining whether or not you are capable of repaying your loan.
At Kinara Capital, we offer MSMEs collateral-free equipment finance to buy new or second-hand machinery to improve your small business. This allows you to increase your business efficiency without submitting collateral for security. Kinara will instead hypothecate the machine that is bought with the loan, while the machine will be entirely under your ownership, and Kinara will not collect any ownership documents for it, in case of a default, your machine might be seized.
Machinery loans without collateral in just 24 hours!
How is Equipment Finance Different from Equipment Leasing?
The primary distinction between equipment leasing and equipment finance is one of ownership. An equipment lease allows you to rent machinery or equipment from a vendor in exchange for a monthly payment, but you cannot own the equipment during the lease term. Therefore, the most significant disadvantage of leasing is that it can be significantly more expensive than purchasing the equipment outright.
Equipment finance is a loan that allows you to buy a piece of equipment. Equipment financing is your best option if you want to use a piece of equipment that you know is durable and will last a long time. In addition, because the equipment itself will serve as collateral, the qualification process is simplified. This is also known as hypothecation, where the equipment purchased through the business loan will act as collateral if you cannot repay the loan.
At Kinara Capital, we provide affordable equipment finance interest rates, require minimal documentation, and have an average turnaround time of 24 hours. Established MSMEs can easily obtain a machinery loan and expand their operations without putting up any collateral.
Things to Look for in an Equipment Financier
While looking for equipment finance, you must choose a reputable lender. Today, with so many options available, make sure you look for someone who offers:
- Fast service/quick disbursal
- Flexible terms and conditions
- Minimal documentation
- The option to buy used or second-hand machinery
Kinara Capital ticks each one of these boxes and helps you avail of equipment finance loans through a fully online process. With our 1-minute eligibility check, you can apply for a machine loan online. If you qualify, you can continue the loan application process online. Alternatively, a Kinara loan officer will contact you as soon as possible to complete the remaining requirements in your preferred language.
Importance of Upgrading Existing Machinery or Equipment
Equipment isn't meant to last indefinitely. Like nearly everything else, it has an expiration date and can begin to show signs of wear and tear that necessitate attention. Aside from simply becoming less reliable as a result of system changes over time, older equipment may no longer be able to protect personnel and other equipment as safely as it was designed.
Therefore, to expand your small business, you must invest in the latest technologies and equipment. You can take financial support from Kinara Capital's equipment finance loans and boost your business’s performance!
- Equipment finance
- Machine loan
- Asset purchase