A Comprehensive Guide On Packaging Equipment Financing

Nov 16, 2020

A Comprehensive Guide On Packaging Equipment Financing

As per a report published by Packaging 360 in January 2020, India’s packaging industry is slated to reach USD 73.6 billion this year, according to the predictions of the Indian Institute of Packaging (IIP). It is one of the few industries in the country that has not displayed any signs of slowing down, despite the general lag in other sectors of the economy.

IIP’s predictions bear good news for packaging unit owners and those looking to venture into the industry to set up a new business. Furthermore, the easy availability of packaging equipment financing is also one of the perks that entrepreneurs belonging to this sector can enjoy when it comes to ensuring ease of business operations.

So, if you are looking to avail a packaging equipment loan to upgrade your existing equipment or to purchase new ones, read on to learn more about which one can be the most beneficial option for you!

Types of Packaging Equipment You will Need to Purchase for Your Business –

Before looking for options to finance the purchase of packaging equipment, it is first crucial to set a budget for the same.

Packaging as a sector has vast coverage across industries, and the type of equipment you will require depends on the scope and scale of your business.

Few of the most common equipment used in packaging companies include –

  • Cartooning machines
  • Collating machines
  • Conveyor belts
  • Machines for cleaning, sterilising, drying and cooling
  • Filling machines
  • Pouch packing machines
  • Air packing machines
  • Heat sealers, etc.

Now, the price of each of these machines can vary between a few thousand up to a few lakhs.

For example, if you are looking to set up a grain-packing business, purchasing a single automatic machine for the task can set you back by Rs. 5 Lakh. You will thus have to set a budget first depending on the type of equipment you will require.

After that, identifying the most suitable packaging equipment financing options will become much easier.

Types of Packaging Equipment Loans You Can Avail –

Given the nature of the business, there are several types of financing that you can avail for the purpose of purchasing packaging equipment.

Take a look!

  • Business equipment loans

As the name suggests, this loan can be availed specifically to finance the purchase of equipment for a business. These are big-ticket, unsecured loans offered by various financial institutions at a comparatively higher rate of interest.

Business owners also have to comply with several packaging equipment financing eligibility criteria before they can avail this loan. For instance, most lenders look at the business vintage before approving the loan, which makes it difficult for start-ups to avail it.

  • Government schemes

Few specific types of packaging businesses can avail funds under the Credit Linked Capital Subsidy Scheme for small scale industries offered by the Government of India. Through this scheme, borrowers can enjoy a subsidised interest rate on the business loan they avail to finance their packaging business.

However, these schemes are limited only to a few businesses and are subject to approval from the Government, thus restricting their accessibility. The packaging equipment financing repayment procedure generally depends on the lender you opt for.

  • Gold loans

Even though these are not the conventional EMI-based borrowing options, these make for extremely convenient avenues to avail financing. Owing to their secured nature, these loans are available at the lowest interest rates, and are devoid of stringent eligibility or documentation requirements.

A gold loan for packaging equipment financing, especially if availed from Rupeek Fintech Pvt. Ltd., can be the perfect solution for your investment woes.

Why is a Gold Loan the Best Option for Packaging Equipment Financing?

Gold loans, in general, make for excellent options to avail funds due to their accessibility and high-value financing. However, gold loans availed from Rupeek add several more advantages to the already existing list of benefits under this loan type.

Few of the features of these loans include the following –

  1. Highest loan to value percentage

In a secured loan, LTV signifies the percentage of your collateral’s total value you can avail as a loan. For instance, if you pledge gold worth Rs. 5 Lakh at an LTV of 80%, you can avail Rs. 4 Lakh as your loan amount. In line with this, you can enjoy the highest LTV against your gold’s value if you avail a loan from Rupeek.

  1. Loan at doorstep facility

The lender also offers the most convenient packaging equipment online apply process, which can be completed without leaving the comfort of your house. After you send an online application through the company’s app or website, a loan manager is appointed to visit your house on a scheduled date. He/she aids in the completion of formalities like gold valuation and KYC registration processes. If everything is in order, the loan is approved instantly.

  1. Fastest disbursal

Upon approval, your loan will be disbursed to your account immediately. Also, from gold valuation to loan disbursal, the entire process completes within 30 minutes. Instant disbursal of the loan amount can be especially beneficial if you require funds to address any urgent financing needs. Additionally, the loan manager will wait at your house before leaving with the pledged gold until you receive the funds in your bank account.

  1. Security of the pledged asset

Rupeek Fintech Private Limited also employs strict measures to ensure that your pledged asset is secure. For instance, your gold is collected in a GPS-traceable bag for safe transportation and delivered to a nearest partner bank located within a 3 km range, where it is deposited in a safety vault until the time you can re-possess it. Furthermore, during this period, your gold remains insured, without you having to bear any additional expense for it.

  1. Flexible tenure and easy repayments

The lender offers benefits of a flexible loan tenure, which can range between 3 months and 6 months. It can also be renewed and extended by a further term of 6 more months. During this period, you will only have to pay the monthly interest amount. The principal amount is then repaid as a bullet payment at the end of the tenure. This makes the repayment procedure for a gold loan much more convenient. If the need be, you can also choose to defer the entire repayment liability until the tenure’s end and make a one-time payment instead of monthly paymentsThese are but a few examples of why a gold loan makes for the most effective packaging equipment financing option among all. However, make sure to research the market before applying for the loan, to ensure that you avail the one most beneficial loan option as per your needs.

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