How to choose an equipment finance company in India?

Investing in new equipment and machinery is essential for every enterprise. Your requirements may differ based on your organization’s short-term and long-term needs, but upgrading machinery is a continuous effort to maintain productivity and efficiency. However, there might be times where you might need to upgrade machinery without sufficient upfront capital to invest. In such times, equipment financing can come to your rescue. 

Why should you go for equipment financing and leasing?

Depending on your individual company’s needs, you may choose a loan, finance lease, or operating lease as a solution. But before diving into how you can select the best equipment finance company for your needs, let’s have a look at why you should go for equipment financing 

• If you need to upgrade your technology but need to preserve liquidity for other purposes, you can go for equipment financing solutions
• If you need technical equipment for a short period that you may not need later, you can opt for equipment leasing options. 
• If you are not sure what returns to expect from your investment, you can lease the machinery for a short tenure before deciding to make the purchase. 
• If you do not have additional collaterals to offer to your existing bank, you can take an equipment loan wherein the equipment purchased would be considered the collateral. 
• If you want to boost your working capital, you may avail refinance or top up on your existing loan. 

Equipment financing can boost your business and revenue growth as you would only need to make smaller instalments while the equipment would continue to generate higher revenue for you.

Additional Read: Top Trends in Construction Equipment Finance Market

What should you look for in an equipment financing company?

1. Expertise

Providing an equipment finance solution needs a detailed understanding of machinery, business industry, equipment usage, and cash flow cycles. Some equipment is also imported and requires a combination of Loan/Lease, Letter of Credit (L/Cs), and Buyer’s credit to finance.

Choose your equipment financing partner carefully as these loans are not just transactional but also advisory as you may need the financier’s expert advice to recommend the best solution. 

2. Reliability 

Assets financed under equipment financing are critical for the very survival of your business. And you can customise such loans to suit the nature of your business and equipment type. You need to ensure that you take such advances from reliable lenders, who will be around for the entirety of the loan’s tenure. 

Since they are critical to your day-to-day operations, it is better to take such finances from reliable, trustworthy, and credible partners like Tata Capital.  As a part of the marquee Tata Group, we at Tata Capital, with over a decade of experience, are committed to doing right for our customers.

3. Convenience

Equipment finance loans are long-term in nature and require back and forth interactions and regular transactions with your financier. You must access such loans from partners that provide you with the latest technology and convenience to viewing your transactions, download statements, make timeline payments, and settle loans virtually. 

The pandemic has only reinforced the importance of digitization in the financial services space. At Tata Capital, we are committed to providing our customers with the best digital experience to seamlessly control their finances regardless of their location. 

4. One-Stop Financier 

Unlike standard term loans, equipment finance loans require a certain depth of industry understanding, machinery knowledge, and expertise to structure the right kind of offering. You would also require companies that offer you the width and depth of offerings to finance all equipment needed to run your business. 

Going for a company that has diversity in offerings and specialization in equipment financing is prudent. For instance, a construction company may also require computer hardware and office furniture for their daily operations. Choosing a company that can meet all of your needs under a single roof will save you many hassles in the future.

Additional Read: What Vital Role does Equipment Financing Play in Reviving Business in Post Pandemic Period?

5. Transparency 

It is essential to access any financing at the best terms possible. The best terms are the lowest interest rates and transparency in other charges, like processing fees, prepayment charges, penal rates, etc. 

Given that these loans are long-term loans, choose an equipment finance partner that offers competitive rates and is transparent about its future pricing approach to avoid unpleasant surprises later. At Tata Capital, we partner in our customer’s growth and ensure complete transparency and fairness in our communications and transactions.

6. Partnership 

OEMs play an indispensable role in providing the equipment and various maintenance solutions to business. All significant OEMs associate with strategic financing partners, including Tata Capital, to provide their customers with integrated solutions. Choosing such financing partners with OEM tie-ups is beneficial in managing the equipment better during its lifespan.

Amidst multiple equipment finance companies in the market today, finding the right fit for you might seem like a daunting task. Get in touch with our experts to guide you through this process.