What Most MSMEs Get Wrong with Machinery Funding?

Getting new equipment might be an urgent need for many growing MSMEs. But the reality is somewhat different. Most companies take machinery funding the wrong way. Be it a delayed decision or using the wrong financial product, the mistakes can drain working capital and restrict further growth.

On that note, here are the five myths you should understand so that your MSME does not make the same mistake. Before considering the types of working capital, you need to learn these:

Myth 1- Bridge Funding Is Not for Buying Equipment

Bridge funding is temporary funds acquired through reliable banking relationships. And thinking that bridge funding does not help with equipment purchase is a mistake. Bridge finance is often used for emergencies. Trusted machinery funding solutions with bridge finance help clients who need to move speedily.

When expansion opportunities or urgent orders require new equipment, bridge funding becomes a practical solution. It helps the business proceed with the right procedure while converting to long-term finance later.

Myth 2- Unsecured Loans Aren’t Suitable For Buying Equipment

Many business owners assume that buying machinery always requires heavy collateral. But that’s no longer the case.

Options like invoice financing, trade finance, corporate loans, and even machinery loans are available as unsecured business loan for MSMEs solutions. These are helpful for companies that don’t own large assets or can’t lock them up for funding.

Find a reliable funding service provider that works with lenders who evaluate the business’s revenue patterns, order pipeline, and GST records.

Myth 3- Equipment Should be Funded from Working Capital

Thinking that equipment isn’t funded from different types of working capital is a common misconception that often results in cash flow issues for MSMEs. Working capital finance is meant for day-to-day operations. Take the examples of cash credit, overdrafts, packing credit, or bill discounting. They help manage cash flow and pay vendors, and at the same time, handle payroll alongside keeping the business moving.

Tying up those funds in machinery reduces liquidity and may disrupt operational stability. For long-term assets like equipment, dedicated machinery funding or any other unsecured business loan for MSME is more appropriate.

Myth 4- All Machinery Finance Takes Months to Process

Many SMEs assume that equipment finance requires a lengthy approval process. It is true that conventional bank loans can take months.

However, a reliable provider of funding solutions may complete the process within two weeks with the right documents.

Machinery can be financed properly by keeping growth plans on schedule without unnecessary delays. But you need to find the right guidance alongside smart lender partnerships.

Getting machinery finance right doesn’t mean chasing the lowest rate or waiting for perfect conditions. It means choosing funding that matches your pace and priorities. So, whether it is machinery funding, bridge finance, or any other unsecured business loan for MSMEs, MSMEs can act conveniently.

With the right types of working capital, business growth becomes a lot less stressful. On that note, Capstone helps clients get access to machinery funding within two weeks.