Upgrading to advanced machinery enhances business growth, especially those heavily involved in manufacturing and production. Also, the constant requirement of capital to run a business makes it difficult for an entrepreneur to upgrade to advanced machinery instantly.
Machinery loans Abbotsford are an optimal financial source to upgrade to advanced machinery. With these loans, you can fulfil your business ambitions and goals. Before you apply for a machinery loan, you must know the type of questions that come along.
Let us head up!
Things To Know About Machinery Loan
How Much Amount Can I Borrow with a Machinery Loan?
The borrowing amount of a machinery loan depends on various factors such as the size of the business, type of machinery, number of machinery, company finances, etc. While you avail of a machinery loan, your potential lender will consider your credit score, your business’s current performance, future growth potential, and much more. You must follow a general rule of thumb: maintain a good credit score. Higher credit scores increase your chances of securing your desired loan amount at favourable terms.
What Are the Eligibility Criteria and Required Documents for an Equipment Loan?
The exact documents and eligibility criteria will be different depending on the lender you pick, Here are a few of the common ones:
Eligibility Criteria:
- You need to be a Canadian citizen.
- You need to be at least 25 years of age and less than 65 years old.
- Your business vintage must be at least three years.
Some of the Required Documents:
- Latest bank statement of all your active accounts from the last 6 months.
- Balance sheet
- Profit and loss report
- Audit reports
What are the Benefits of a Machinery Loan?
The most important benefit of equipment and machinery loans Abbotsford for business is it provides you with the funds to help you buy the equipment of your choice. With additional funding, you get to retain most of your working capital. So, your primary expenses stay unaffected, and you have enough funds to manage your unexpected spending.
What Will Be the Duration of the Machinery Loan?
Most lenders offer flexible loan tenure, but it differs among them. You can opt for a short-term and long-term tenure, depending on your financial planning. If you opt for high repayments and want to reimburse your loan faster, avail of a short-term loan. On the other hand, long-term loans can be spread out over multiple years and have smaller payments. Consider this option, as committing a smaller amount of money for the repayment is more convenient.
What Are the Tax Benefits of Equipment Financing?
The machinery purchased using the borrowed funds should be classified as a business expense. This makes you eligible for a tax deduction on your loan’s interest amount. As a result, your total taxable income will reduce, as will the amount of tax you have to pay. Remember that this same benefit does not apply to your loan’s principal amount. Another advantage of purchasing a machine is that it becomes an asset for your business, strengthening your balance sheet.
Am I Required to Describe my Business Plans to Potential Lenders?
Yes, lenders prefer entrepreneurs who have a clear business plan in place. It should give them an understanding of your business and how it will generate revenue. They will also want to know why the machine is required for your business and how you will use it best. In simple words, you need to justify your purchase and explain to them how you will repay their debt.
Where Do I Get Machinery Loans in Abbotsford From?
If you want to get machinery loans or prefer equipment leasing in Abbotsford, Sandhu & Sran Leasing & Financing is a perfect place to cater to all your needs under one roof. We are your go-to destination to help you make a well-informed decision.
A machinery loan can enable you to achieve bigger goals and elevate your business’s trajectory. It is an excellent lending tool; all you need to do is know it well to get the most out of it. Now that you have the answers, consider choosing Sandhu & Sran Leasing & Financing to fund your business needs.
