Equipment financing is the loan option available to businesses for the purchase of any machinery or equipment that is essential for the upgrade or extension and expansion of the business. These loans are provided to small businesses as well as large companies and giving them tax benefits too.
Additional Reading: Equipment Loans
Given below are the basic details of equipment financing.
Eligibility
|
Category |
Details |
|
Eligible applicants |
Corporates, trusts, partnership firms, contractors, etc. |
|
Age |
Minimum age – 21 years Maximum age – 65 years at the time of maturity of the loan |
|
Business status |
The business has to be stable for the last 2 years |
|
Profitability |
The business has to be making a profit-making entity for the past 3 years. |
|
Return filing |
The business needs to be filing ITR for the past 2 years |
Documents
The documents needed for the equipment financing options are mentioned below,
- Identity proof
- Address proof
- Business registration proof
- Supplier details and machinery details including cost of machinery
- Bank statement for last 6 months
- Last 2 years ITR
Types of equipment loans
There are many types of equipment financing options for eligible borrowers. Some of the common types of equipment financing options are mentioned below.
- Construction equipment loan
- Manufacturing equipment loan
- IT and office equipment loan
- Medical equipment loan
- Corporate Aviation equipment loss
- Electronic and appliances
Additional Reading: How Does Equipment Financing Work
Final Thoughts
Equipment financing is a type of loan which is specific for the purchase of any machinery or equipment that is required for the growth and expansion of the business unit. The loan is available at affordable rates and is processed relatively faster than regular business loans.