Industrialists who hail from heavy manufacturing and engineering industries should always keep surplus funds in their banks since they may need stacks of cash for up-gradation of machines or replacing them when the cost of repair exceeds the value of the machinery. Cash-strapped Business owners who are looking for the best equipment loans should think twice before borrowing such loans since the interest rates are extremely higher when compared to other types of loans.
The cost of industrial machinery has increased drastically and this upward trend will only continue to surge further in the future. Buying sophisticated machinery from reputed sellers is not that easy since the cost that is involved in buying such items will be exorbitant. Owners have to pay transportation, installation, and commissioning charges to the seller. Cash-strapped business owners can choose equipment loans that are offered by reputed and reliable banks and repay the amount with ease of flexibility in periodic installments.
Some of the terms and conditions that are brought into effect by the banks and other financial institutions for equipment loans are as follows:
Collateral security: If you are planning to borrow equipment loans immediately from leading banks, then you have to pledge one of your saleable assets like a residential home, vacant land or commercial building to the banks. Bank Officials will release the equipment loans only after scrutinizing the proposal, copy of the property documents with due diligence in the light of the legal framework that governs the procedure of disbursement of loans.
Penalties and fines for delayed payments: Business owners that borrow equipment loans should repay the installments systematically every month and any event of default of payment will be viewed seriously as a violation of terms of disbursement of loan which is mutually agreed upon and duly communicated to the lender during the time of loan getting sanctioned. They will impose a heavy amount as penalty or fine if there is delayed or no payment from the borrower.
Bankruptcy rules: When the borrower who took equipment loans becomes bankrupt or insolvent, the case will be legally contested in the court of law governed by the law of land. Therefore you have to explore the legal angels carefully before signing a contract.
The major advantages of availing equipment loans are discussed below.
You will enjoy lots of benefits when you borrow machinery loans that come with the best interest rates.
Simple background verification checks: If you are a reputed manufacturing or processing business owner with national as well as international reputation, then buying machinery loans is very easy. Bankers will do minimal background verification checks and release the loan amount quickly.
Top up eligibility: One of the important conditions under this loan is proper repayment. If you are repaying it systematically, banks will offer top-up loans once you repay back a reasonable loan amount after a certain point of time.
Freedom of using the fund: Once you successfully borrow the fund, you have the complete liberty of using it for various purposes like buying accessories, spare parts and tools along with the original machinery.
Negotiate a deal with bankers: Bankers during the process of negotiation will specify huge interest rates and strict rules and regulations. Once you negotiate a deal with the officials in order to make them agree to reduce the interest rates and loosen the rules to a great extent.
Foreclosure is allowed: If you have raised sufficient funds from various quarters and planning to pre-close the loan all that you have to do is make a call to the bank and inform them about your decision to opt for pre-closing the loans. One of the officials will address your issue and support you quickly.
Labeled as a privileged customer: If you are maintaining perfect lien with bankers that offer machinery loans, you will automatically become privileged customers. You will receive free credit cards and stand eligible for big concessions in interest rates when you apply for other loans like personal or home loan.
You can utilize the fund for buying commercial vehicles, trucks, small as well as giant-sized equipment, medical equipment, and X-ray machines. You have to submit the proof of purchase to the lenders.