MSMEs require financing to purchase equipment, replenish their inventory, expand their operations, and improve the liquidity of their working capital. Lenders are offering MSME loans to enable those in the MSME segment to have access to capital. Equipment finance or asset purchase are loan products that are offered by Kinara Capital in order to fulfil the need for machinery financing. It can be used to purchase new or second-hand machines.
MSMEs with better machines have shown a marked increase in revenue, as the quality of the products produced is enhanced. The enhanced quality also leads to an increase in customer satisfaction and brings goodwill to the company.
Let’s understand what is an equipment financing loan and how advantageous it is:
What is Equipment Finance?
- A loan or lease used to acquire business equipment is referred to as equipment finance. CNC machine, Powder Coating machine, Saw Blades, Medical Equipment, Cutting Tools are just a few examples of business equipment.
- There are two options available under equipment finance: Obtaining a loan to purchase equipment or to lease equipment.
- The type of the equipment being financed and the borrower's ability to acquire a loan on favourable terms usually determine whether buying or leasing is a better alternative.
Get a machine financing loan in just 24-hours!
What is hypothecation?
Offering an asset as collateral security to a lender is known as hypothecation. The borrower has possession of the property, which is owned by the lender. In the event that the borrower defaults, the lender has the authority to confiscate the asset under his ownership rights.
It is done in the event of movable assets in order to create a charge against collateral for a loan. The borrower retains possession of the security in a hypothecated transaction. As a result, if the borrower defaults on payments, the lender must first seize the security (asset under hypothecation) and then sell it to recoup the debt.
Why should MSMEs take an equipment financing loan and lease it?
One of the biggest advantages of buying rather than leasing equipment is that after the loan is paid off, the company owns a valuable asset. If the company needs money for anything else, such as expanding operations, the previously purchased equipment can be utilised as an asset to the company.
Capital expenditures, such as those for computers, machinery, and other equipment, are important to a company's continued functioning and growth. Purchasing new equipment, especially for small organizations, can provide considerable benefits.
Here are some advantages of taking an equipment financing loan:
- Increase efficiencies and productivity
- Improve safety and security
- Meet changing business needs
- Take charge of your situation
- Make the most of tax incentives
- Maintain your competitiveness
Equipment financing loans from Kinara Capital
Kinara Capital helps small business owners in India by driving financial inclusion for them, which improves their lives and livelihoods, as well as the local economies they are part of. For your business needs, we have the best lending products. On a reducing rate basis, interest rates begin at 21% annually. Our loan terms range from 12 to 60 months.
You can avail of a loan for purchasing new or old machines, assets and equipment. We have served more than 36,000 happy customers who have expanded their business and reached new heights by taking equipment financing loans.
You can get a 1-minute eligibility check done on our website and avail of a loan easily. Our loan officer will get in touch with you and assist you through the process or you can complete the loan process completely online.
- Machinery loan
- Equipment loan
- Asset Purchase