Construction Equipment Financing: Interest Rates, Eligibility and Applying Online

Nov 16, 2020

Construction Equipment Financing: Interest Rates, Eligibility and Applying Online

India’s construction industry is one of the primary contributors to the country’s GDP. In fact, as per a report published in The Economic Times, ICRA had predicted stable growth for the construction industry in 2020 and beyond, making it one of the most lucrative sectors to invest in.

With various new projects being granted to the country’s infrastructural development, construction business owners are expecting to maximise their benefits from these opportunities. Furthermore, if anyone is looking to embark on a new business venture, the construction industry can be an extremely profitable proposition.

However, regardless of whether the construction business is old or just starting out, it cannot function smoothly without proper equipment. Purchasing new construction equipment or upgrading the existing ones can be quite cost-intensive if you do not have a proper plan in place to finance it.

Nonetheless, with various construction equipment loans available from financial institutions across the country, the issue of raising funds can be solved without hassle.

Construction Equipment Financing – Key Facts You Should Know

The sector of construction equipment in India consists of 5 main segments. These are –

  • Road construction equipment
  • Earthmoving equipment
  • Concrete equipment
  • Material processing equipment
  • Material handling equipment

There are several manufacturers in the market that produce the equipment required in each of these segments. Given below is a list of such equipment that is most commonly required in each of the above-mentioned segments.

  1. Excavators
  2. Backhoe loaders
  3. Motor graders
  4. Dump trucks
  5. Various types of cranes including tower, crawler, pick & carry and slew cranes
  6. Transit mixers
  7. Concrete pumps
  8. Crushing equipment, etc.

These equipment types can retail at prices ranging between a few thousand rupees and a few lakhs. For instance, a water pump can be around Rs.30,000, a motorised concrete mixer can cost you around Rs. 2.7 Lakhs, a tower light can be around Rs. 5.6 Lakhs, while a mini excavator can set you back by Rs. 12 Lakh.

Thus, purchasing construction equipment will require you to seek big-ticket financing options.

Following are a few construction equipment loan options to look through, which can help you purchase these machineries without hassle.

Financing Options for Construction Equipment –

When it comes to financing the purchase of construction equipment, most business owners look to availing loans that are designed exclusively for this purpose. There are several lending institutions that offer these loans at moderate to high construction equipment financing rates in India. They can include –

  • Term loans such as long, medium or short term loans
  • Business loans
  • Equipment financing
  • Machinery loans
  • Loan against property

Few of the features of these construction equipment loans include –

  • These are big-ticket, unsecured or secured advances.
  • Some of them are mostly offered to those with a business vintage of 3-5 years.
  • Borrowers must satisfy a few construction equipment financing eligibility criteria, including a high credit score.

Given the conditions attached to the availability of these loans, it can be difficult for individuals looking to start a new business, or without a prior credit history to avail the advance.

Alternatively, they can look into SME loans provided by various financial institutions for purchasing construction equipment. These loans can be availed exclusively by small and medium enterprises of the country. One of the most crucial benefits of these loans is that they are available at affordable construction equipment financing interest rates.

However, to avail these loans, one has to undergo a complicated documentation process, wherein they will have to submit several business-related documents. A borrower also needs to stick to the construction equipment financing repayment schedule provided by the lender and pay EMIs in time.

To do away with all such formalities, one can look into gold loans as a medium for financing the purchase of construction equipment.

Following is a look at why gold loans are the most viable options when it comes to funding the purchase of construction equipment for your business.

Gold Loan – Its Features and Benefits

While gold has, for a long time, been a convenient option when it comes to availing funds, the sector was highly unreliable due to the absence of a proper lending structure.

However, with the emergence of institutionalised financing through gold loans, raising funds by utilising gold as an asset gained popularity. With lenders like Rupeek Fintech Pvt. Ltd. introducing online processing, availing gold loans has become much more streamlined. Further, utilisation of a gold loan as a construction equipment loan availed from this lender imparts several benefits, making it a suitable choice for business owners.

These benefits include –

  • Highest loan to value

LTV or loan to value denotes the percentage of an asset’s value you can avail as a loan against it. With Rupeek, you can avail the highest LTV against your gold, allowing you to gather substantial funds to finance the purchase of construction equipment. Furthermore, the loan is available at the lowest interest rate, making it affordable.

  • Doorstep loan facility

Apart from construction equipment financing online application facility, you can also enjoy doorstep availability of the loan. For this, you will have to make an online application through the company’s app or website. The loan manager will then be appointed to visit your house on the scheduled date for gold valuation and KYC registration. After completing these formalities, if everything is in order, your loan will be approved instantly.

  • Fastest loan disbursal

With gold loan availed as a construction equipment loan from this lender, you can enjoy instant disbursal of the loan amount to your bank account after its approval. With immediate approval and disbursal, the entire process takes only 30 minutes to complete. Additionally, the loan manager waits at your house until you receive the amount before he/she leaves with your gold.

  • Guaranteed safety of the gold

The gold you pledge is collected from your house in a GPS-trackable bag and is deposited at the nearest partner bank’s safety vault within 3 km of your house. It remains in the vault until the time you can re-possess it after the completion of the loan tenure. The gold is additionally secured with a free insurance policy.

  • Convenient repayment terms

The repayment terms for gold loans are simple and hassle-free. Unlike other loans, you will not have to pay an EMI every month. You will only be required to pay the monthly interest amount, and the rest as a bullet payment at the end of the loan tenure; or, you can defer the entire payment to the tenure’s end. In this regard, the flexible loan tenure ranging between 3 months and 6 months and extendable by another 6 months can be extremely convenient.Apart from these, this gold loan does not require you to satisfy any stringent eligibility criteria. As a result, with such benefits and more, this pre-approved loan with minimal documentation requirements makes for the most convenient option to serve as a construction equipment loan.

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