Availing Machinery loan is a big decision, and every company takes it with a view to expand their operation, increasing productivity or purchasing new machinery. But the application can be a long process, and one mistake can lead to rejection or delayed machinery loan application. To ensure you have minimum hassle and higher chance of approval, here are few things you should not do at the time of machinery loan application.
This post describes about what are the mistakes we usually do in applying for machinery loan and how to avoid those mistakes.
7 Mistakes that You Should Avoid When You Are Applying for a Machinery Loan
Here are few common mistakes which you should avoid when Apply for Machinery Loan.
1. Not Assessing Your Business Needs Accurately
One of the biggest mistakes you could make when applying for machinery finance is not accurately working out how much you need your business. Because if you overestimate how much you want the loan for then the debt will be unnecessarily high, and if you underestimate the amount you need, then you won’t have enough money to purchase the machinery you really want.
Tip: You should analyze cost of machinery and also there can be many other costs such as installation, maintenance, insurance etc. So on basis of it you will able to understand exact loan amount need to be applied for Machinery Loan.
2. Ignoring the Importance of Credit Score
One of the most crucial things that machine loan lenders consider when they process your machine loan application is the credit score. If you have been spoiling your credit for, there is every chance that you will be charged a higher machine loan interest rate or you may even be denied a machine loan.
Tip: Before applying for machinery loan, Get your credit score from Ruconnect App and if needed, clear off the existing loans and make a habit of repaying the loan on time which will in turn increase your credit score.
3. Overlooking Different Loan Options
With so many finance options available, if you do not explore various loan products, you may lose on better terms and rate. Ruloans’ tie-ups with 265+ best-in-class private banks, PSU banks, NBFCs and financial companies like U-Gro Capital allows us to provide Machinery Finance in India as per your eligibility and convenien.
Tip: Use Ruconnect App to compare loan offers from multiple lenders and choose right lender for machinery loan who can suits your business requirement at best terms.
4. Not Preparing Comprehensive Documentation
While applying for machinery loan, do not see the cost of machine in isolation. Look at total cost of ownership which includes maintenance, repairs and operational costs. Do take these costs into account so that you do not stress your cashflows and repayment capacity while repaying the loan.
Tip: Factor all these in when you are applying for a loan. This will save you from the stress of having to look for more money and if anything you will be able to service the loans without any struggle.
5. Ignoring the Total Cost of Ownership
While applying for machinery loan, it is important to not see the cost of machine only on a standalone basis. You should consider total cost of ownership which includes maintenance, repairs and operational costs. Please do consider these costs to avoid stress on your cashflows and affecting your repayment capacity.
Tip: Consider your entire cost of attendance before borrowing. Doing so can help you avoid over-borrowing and be more comfortable managing loan payments later on.
6. Not Using Technology to Your Advantage
In this digital era, technology can ease loan application and approval as well. Ruloans presents Ruconnect App- India’s First B2B Loan Distribution Channel Partner App to make machinery loan and MSME financing application easy for you.
Tip: Use Ruconnect App to Apply for Machinery Loan, track your application real time and avail other important features like checking your customer’s CIBIL Score and online claiming payouts. This Technology driven approach will save your time and help you in getting the loan faster.
7. Failing to Consider Future Growth
When you take machinery loan, you need to think about the future growth of your business. If you take a loan which will be sufficient only for your present needs and doesn’t have any space for the future requirements then it will put a full stop in your business growth.
Tip: Future proof your business – choose a machine loan that’s flexible and scalable. Ruloans is one of the few lenders that offers various types of finance to scale with your business, ensuring you have enough capital when you need it as your business grows.
Final Words!
Applying for a machinery loan can be a major step in any startup and it can be easier and less stressful if you avoid these mistakes. We are helping the business to get the funds they need to grow their business. With our largest network of over 25,000 distributors, we tied up with India’s leading Banks/NBFC’s & financial institutions, to provide you with customised loans.
Whether it’s a machinery loan, machinery finance or any other business financing you are looking, we at Ruloans have got your back. Download our Ruconnect App today and know more how you will be able to explore more, do the paperless and hassle-free filing of your loan application and start growing your business by getting the proper financial support.
