Any new business in the field of construction or manufacturing would need heavy machinery. But always you may not have enough funds to invest in heavy and costly machines. In that case, taking help of the financial agencies can be beneficial for you. There are different types of heavy machinery loans schemes which are available for which business owners can apply for in case they want to buy heavy machinery. You can either buy new equipment or buy the used ones. When we talk about heavy-duty equipment, then it includes equipment like earthmovers, bulldozers, forklifts, tractors, engineering equipment, excavators, cranes etc. This heavy machinery loan falls in the category under business loan.
One of the key factors that you need to take into account while applying for heavy machinery loans is that its terms and conditions. You must qualify the eligibility criteria before applying for this loan.
What are the key factors you need to take into account while going for Heavy Machinery Loans?
Credit: If you are planning to apply for this loan then you must have credit above 620 for a period of at least one year. Good credit score makes loan approval easy and simplified.
Cash flow: In case you don’t have good credit, but the revenues is on a higher side; then it becomes easier for you to qualify for the heavy equipment loan.
Down payment: What if you don’t have any of the above parameters qualifying, you can still get heavy equipment loan based on the down payment. For example, if you are planning to buy heavy equipment of $ 20,000 and can make $5000 as down payment, then you can get construction equipment loan.
Benefits of Heavy Machinery Loans:
There are several advantages of applying for heavy machinery loans which include the following:
No need of collateral, the equipment itself is used as collateral
Preserves business working capital
Heavy machinery loans give you the leverage of flexibility of repayment.
Faster and easier loan application and approval, it usually takes 48 hours for loan application and approval.
There are certain tax benefits that you get on heavy machinery loan. It is advisable that you must speak to your accountant about the same so that you can get to know about the benefits.
Tips for choosing the Heavy Machinery Loans provider:
Since heavy machinery loans is a good choice to buy or upgrade to new equipment, there are certain points that you need to consider before making a decision:
Interest rate: Whenever you are applying for loan irrespective of the type, it is important that you must choose a loan lender which offers good interest rates. Since there are different lenders, the interest rate of the same may vary. So when it comes to choosing the one, you need to require the interest rate.
Repayment period: Another parameter that you must take into account while choosing a loan provider is the repayment period. This will leave impact on the EMI and hence becomes one of the deciding factors.
Tax benefit: We have already mentioned about the tax benefit that heavy machinery loans have to offer. Asking the bank about the same will make you more aware of the same.
Charges: the Loan application process is a tedious one, although, the heavy machinery loans are comparatively faster and easier, you must not forget to ask about the charges that the lender might levy.
If you are planning to enhance business productivity, it is important to invest in good machinery and equipment, heavy machinery loans make sure that you don’t have to pay an upfront amount and become the owner of the state of the art machinery.
