According to surveys, India ranks 8th in usage of machine tools. This huge demand comes from 36.2 million small-scale industries, spread all over the country. It is essential to buy or lease proper equipment to run a business in the best way possible.
Investing in machinery includes the cost of acquiring, operational cost, repairs, upgrades, etc. All of these can be handled with the help of a machinery loan. One must also choose a supplier to purchase or rent from. Utilising some essential equipment for small businesses can help it grow and stay ahead of its competition.
While the credits let an owner choose the best supplier without worrying about the budget, there are certain things one should consider while selecting a dealership to acquire equipment from.
Buying or leasing?
Choose a supplier depending on whether to buy or lease the equipment. Certain distributors might be more eager to rent units, while some might prefer selling them upfront.
Buying or leasing equipment come with their pros and cons. When a business owner leases machinery, they pay lower upfront costs and can upgrade whenever they want. That gives them a flexibility to use the latest machines for their production requirements at all times. The supplier might also bear repair costs. But a lease contract can restrict a businessman for a longer time period. The latter also limits the choices to a few brands and models.
On the other hand, if a business owner decides to buy the equipment, they can avoid the legal hassles of long term leases. Initial costs of purchasing will be high, as well as any cost of repairs. Such impending budget issues can be avoided with the help of machinery loan.
Value added services
Another important thing a business owner should consider is the value-added services that many suppliers provide. These are generally delivery of the equipment to the site, installation, and replacement of parts in case of a malfunction.
If you are part of an industry benefiting from equipment financing, the right choice of supplier is vital. Look for those who offer a comprehensive set of services. Usually, companies who supply directly to businesses provide installation, training, etc.
Range of products available
It is better to communicate with the supplier to see whether they stock a particular company’s product or not. Every business has its unique requirement, and the owner might have a certain brand in mind. One should always go for the tool needed for the job as alternatives might not provide the same output.
Financial institutions around the country provide machinery loans to entrepreneurs for buying or leasing new equipment.
Lenders offers loans of up to Rs. 30 Lakh with affordable machinery loan interest rate. They also provide pre-approved offers on business loans, home loans, personal loans, and a range of other financial products and services. One has to share only some necessary details online to check your pre-approved offer. This hassle-free process saves time and simplifies the procedure of financing.
Repair and other services offered
Machinery, especially manufacturing equipment requires frequent service. It is essential to choose a supplier that provides the quickest service time. Productivity will decrease when the machines are out of order, and it is important to find out a dealer who offers the best turnaround time for servicing. Also, before a business owner completes the deal, they should find out the service charges and other associated costs. These should also be considered while applying for a machinery loan.
Is the supplier GST compliant?
A businessman will get tax credit benefits if a supplier is registered with GST. Any purchase will show on GSTR-2A if a supplier provides purchase bill with GSTR-1 Return. The business owner earns input credits after a dealer pays payment tax and fills the GSTR-3 form.
Investing in the latest machinery is crucial for business growth. With the availability of easy-to-avail business loan in India, one can finance their equipment needs and afford the right machinery supplier.