Equipment loans are considered ideal for customers who own business whether SME or large enterprises requiring long life equipment needs, who prefer the ownership and the associated tax benefits of owning equipment’s through loans. There is also the option of equipment leasing which includes operating leases, finance leases, hire purchase arrangements and other customized products. However, when you own an equipment through a loan the ownership benefits are varied.
There are a variety of equipment loans available to businessmen whether large corporations or SMEs with a variety advantages:
|Bank||Interest rate||Type of Loan|
|HDFC bank||15% onwards||Commercial or construction equipment|
|Kalupur bank||9.50% onwards||Manufacturing and service sector|
|Kotak Mahindra bank||8.90% onwards||Farm and Constructionequipment|
When a businessman needs equipment, getting a business equipment loan could be an intelligent financial move. He or she can use these loans to make purchases for virtually any type of business equipment as mentioned in the last section, but the amount that can be borrowed is based on the type of equipment that the entrepreneur is buying as well as whether the equipment is brand new or used.
A car loan and an equipment loan functions similarly. The equipment serves as a collateral to secure the loan, so an additional collateral is not necessary. Most equipment loans are usually come with fixed interest rate around 8% and 30%offering a fixed term length ensuring that the monthly payments are always the same.
The term extension is based on the nature of the equipment and the life expectancy of the equipment. Only some lenders would be agreeable to extend the term of an equipment loan beyond the fixed expected useful life of the equipment itself.
Some entrepreneurs choose to lease equipment instead of getting an actual loan. There might be advantages to equipment leasing, but with an equipment loan, he or she will own the equipment after the loan is paid off. With a lease, he or she will have to give back the equipment once the lease term is done with.
The following are the document needed to submit for Equipment Loan application process:
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