Looking to invest in the newest equipment for your business but can't manage the finances? With Equipment Financing options, you can procure the equipment required to expand and grow your business. We take you through Equipment Finance meaning with this article.
Equipment Finance – The Meaning
Has the question of what are equipment loans crossed your mind when exploring business development planning? Equipment finance, or commercial equipment loan offers businesses the financial capability to procure new machinery or equipment or upgrade the prevailing machinery. Whether you are classified as a small to medium enterprise or a large enterprise, you can opt for Equipment Finance. The loan amount, the interest rate, the tenure for repayment and other aspects towards the loan varies from business to business and banks. Every bank or financial institution offers a curated loan experience to match the business's financial objectives. With equipment finance, additional options such as hire purchase arrangements and equipment leasing, including finance leases and operating leases. When you procure the machinery or equipment through Equipment Finance, the asset in question is automatically considered collateral against the loan. In case of default by the borrower, the lender has the authority to seize the asset and recover the funds—the risk factor for Equipment Finance is low with a relatively low-interest rate.
With the Equipment Financing definition in place, let's look at some of the benefits that are present when you opt for a loan:
A handful of lenders offering Equipment Finance offer up to 100% financing for new equipment purchase. However, the percentage of financing varies from lender to lender.
Equipment Finance is a secured loan and the equipment in question is considered as the collateral by the bank.
Primarily banks offer pre-approval to most borrowers under an Equipment Finance loan to provide a hassle-free and seamless procedure.
Another benefit of Equipment Finance offers flexible repayment options depending on the business financial budget and prepayment ability.
Interest rates provided through an Equipment Finance loan are at competitive rates and depending on the borrower's creditworthiness. Most banks customise the interest rate as per the business requirement.
As we have looked at Equipment Financing meaning, it is essential to know what type of equipment and machinery is permissible to procure through an Equipment Finance Loan. We have put together a list of the types of machinery and equipment below:
Compactors
Fork Lifts
Crushing Plants
Drills
Road Rollers
Compressors
Dozers
Tipper
Dumpers
Hot Mix Plants
Wheel Loaders
Reach Stackers
Cranes
Backhoe Loaders
Excavators
RMC Plants
Graders
Concrete Pumps
Transit Mixers
Pavers
Rock Breakers
DG Sets,
Now that you know Equipment Finance meaning, the benefits of the loan and the types of equipment and machinery eligible for procurement through the loan, you can plan your next business equipment expansion efficiently. To apply for Equipment Finance or Business Growth Loan today, click here.
Know the difference between equipment finance and equipment loan here.
*Terms and conditions apply. Business Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.