Machinery loan is considered a type of business loan that helps entrepreneurs, business owners, and other business entities in acquiring finance to buy machinery/equipment for various business purposes. Loan for machinery purchase helps business entities in gaining more productivity while using new equipment and machinery. Increase in production or output results in higher profits from sales and distribution.
Interest rates offered by banks and NBFCs for their machinery loan shall vary depending on business requirements. Let’s further discuss some of the popular providers of machinery loans in India.
Best Machinery Loan offers are just a click away Apply Now
Machinery Loan: Eligibility Criteria
- Applicant must be between 21 years to 65 years to apply for machinery loan
- Business vintage to be minimum 2 years
- Last 2 years ITR
- Last 12 months’ bank statement
- Applicant should not have defaulted on any previous loan
Calculate EMI on your equipment finance required for your business in just 3 Easy Steps, Click here
- It helps to buy new equipment/machinery and is also term as equipment financing
- Used to refurbish, modify or change existing machinery/equipment
- To repair faulty machines or equipment or to upgrade
- To buy machinery loan for new business
- Flexible loan repayment options with easy EMIs
- Used as a working capital loan or equipment finance
- Machinery loan for startups is an additional benefit for new businesses
- Collateral-free loans from selected NBFCs, Small Finance banks, etc.
Steps to Apply for Machinery Loan
Machinery loan can be applied via online and offline procedures
Step 1: Applicant need to visit the official website of the bank or lender
Step 2: Fill in and submit the loan application form online
Step 3: Submit all the required documents along with proofs and photographs
Step 4: After documents submission, the bank’s representative shall contact the applicant to proceed with the loan procedure
Step 5: If the application and documents are approved, the bank shall approve the loan within defined working days
Step 6: After loan approval, the money shall be disbursed in the mentioned bank account of the applicant
- For offline loan processing, applicants are required to personally visit the bank or financial institution.
- Applicant shall carry all the required documents along with duly filled application form
- After submitting the application form and documents, the bank’s representative shall proceed with the loan process.
- Once all the documents are approved, the bank shall approve the loan and disburse the loan amount in the mentioned loan amount within defined working days
Apply for Business Loan @ 16% p.a. onwards Apply Now
- Duly filled application form with latest passport-sized photographs
- KYC documents of the applicants and co-applicants, if applicable, such as PAN Card, Aadhaar, passport, Voter’s ID card, Aadhar Card, Driving License, Utility Bills (Water and Electricity Bills)
- Proof of income
- Last 1 year’s bank statement
- Existing facility sanction letter
- Original and valid quotation of the machine(s) – To be purchased
- Additional documents, as required by the bank
Machinery loan finance is also offered to small and new businesses, as well as to start-ups for the purchase of new equipment and to buy machinery items that shall help increase the productivity of their business and eventually result in their business growth and expansion. Individuals with no or less credit history can also avail machinery loans from NBFCs and MFIs at comparatively higher interest rates as compared to banks.
Machinery Loan Top Providers – September 2022
|Commercial Construction Equipment Finance|
|Avail 100% finance on||Commercial and construction equipment|
|Interest Rack Rate||10.00% – 22.50% p.a.|
|Processing fees||New Loan: up to 1% of the sanctioned loan amount|
Used Loan: up to 1.5% of the sanctioned loan amount
|Overdue EMI Interest||2% per month on unpaid EMI|
|Loan Cancellation charges||Nil|
|Asset verification charges||Nil|
|Stamp Duty||At actuals|
|Cheque bouncing charges||Rs. 550|
|Repayment Schedule Charges||Rs. 200|
|Cheque Swap Charges||Rs. 500|
*Bank IRR & Annual Percent Rate(APR) offered for loans extended to individual customers
|Interest Rate||17% p.a. onwards|
|Loan amount||Up to Rs. 45 lakh|
|Collateral / Guarantor||Not required|
|Processing Fees||Up to 2% of the loan amount + taxes|
|Repayment Tenure||Up to 7 years|
|Penal interest||2% per month|
|Document processing charges||Rs. 2360 + taxes|
|Bounce charges||Up to Rs. 3000|
|Interest Rate||1% – 2% per month|
|Loan Amount||Rs. 50,000 – Rs. 2 crore|
|Processing Fees||2% of the sanctioned loan amount|
|Repayment Tenure||Up to 36 months, may exceed up to 10 years|
Best Working Capital Loan offers from leading banks Apply Now
|MSME Machinery/Equipment Scheme|
|Interest rate||Depends on business requirements|
|Loan amount||Up to Rs. 20 crore|
|Repayment Tenure||Maximum up to 7 years|
|Collateral||For amount up to Rs. 1 cr is not required|
|Interest rate||Depends on business requirements|
|Loan amount||From Rs. 1 lakh – Rs. 7.5 lakh|
|Repayment tenure||From 12 months – 36 months|
|Eligibility Criteria||Annual Turnover should be more than Rs. 10 lakh|
|Loan Disbursal Time||Within 3 workinf days|
|Prepayment Charges||Nil after 6 EMis are paid in time|
|Interest Rate||Depends on business requirements|
|Loan Amount||Up to Rs. 1 crore|
|Minimum Age Criteria||21 years|
|Monthly business sales||At least Rs. 2 lakh|
|Business experience||At least 12 months|
|Loan disbursal time||Within 48 hours after loan approval|
Note: All the above mentioned interest rates, fees and charges are subject to change and depends on the sole discretion of the bank, NBFC and RBI. GST and service tax shall be levied extra on the mentioned charges. Interest Rates are updated as on September 2022.
Machinery loans offered by Flexiloans can be used for various manufacturing business segments that include machinery and supplies, plastic works and processing tools, metal equipment and machinery, and industrial plants.
Best SME/MSME Loan offers are just a click away Apply Now
Q. Is it really possible to get a machinery loan without collateral security?
Ans. Yes, you can avail machinery loan without collateral security from various NBFCs, Small Finance Banks (SFBs), and Micro Finance Institutions (MFIs). Some of the leading financial institutions to offer Machinery loans without security are Bajaj Finerv, Lendingkart, Ziploan, Flexiloans, etc. The interest rate offered by these entities shall vary and depend on the applicant’s profile and nature of business.
Q. Is there any subsidy on machinery loan?
Ans. There are a few Government initiated schemes that offer subsidies on machinery loans including the Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation and the Small Industries Development Bank of India (SIDBI).