Machinery & Equipment Loan

A Machinery & Equipment Loan is a type of business loan designed to help manufacturers, traders, and service providers purchase, upgrade, or repair machinery and industrial equipment.
This loan provides businesses with the financial support needed to improve production capacity, enhance efficiency, and adopt new technologies.
It is ideal for MSMEs, startups, factories, and industrial units looking to scale their operations without straining working capital.

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    Types of Machinery & Equipment Loan

    Machinery loans come in various forms depending on the type of machinery, business size, and repayment structure.
    Below are the major types available for businesses in India:

    New Machinery Purchase Loan

    This loan is provided to purchase brand-new machinery or equipment for production, construction, or service operations. Commonly availed by manufacturing, textile, and engineering industries.

    Used / Second-Hand Machinery Loan

    For businesses that prefer cost-effective used equipment, this loan covers the purchase of pre-owned machinery that meets production requirements.

    Machinery Upgrade / Modernization Loan

    Helps existing businesses upgrade outdated machinery with new, energy-efficient, and advanced technology to increase productivity and reduce costs.

    Equipment Financing for Service-Based Businesses

    Covers specialized equipment for healthcare, food processing, logistics, and IT sectors, such as diagnostic tools, kitchen equipment, or tech hardware.

    Construction & Heavy Equipment Loan

    Provides funds for construction machinery like cranes, bulldozers, excavators, and road-laying machines. Ideal for contractors and infrastructure companies.

    Agricultural Machinery Loan

    Offered to farmers and agribusinesses for tractors, harvesters, irrigation systems, and other farm-related equipment.

    Why Is Machinery & Equipment Loan Important?

    Enhances Productivity

    Enables businesses to acquire modern and efficient machines, improving production output and reducing manual effort.

    Promotes Business Growth

    Helps companies expand capacity and operations without disrupting cash flow.

    Encourages Technology Adoption

    Facilitates the upgradation to advanced technology, improving product quality and competitiveness.

    Preserves Working Capital

    Allows businesses to purchase machinery without using existing funds, maintaining liquidity for daily operations.

    Flexible Repayment Options

    Offers customized repayment schedules aligned with cash inflows, making it easier to manage EMIs.

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    FAQs

    What is a Machinery & Equipment Loan?

    It’s a business loan that helps companies purchase, lease, or upgrade machinery used for production, construction, or services.

    Manufacturers, contractors, service providers, and MSMEs engaged in industrial or production activities can apply for a machinery loan.

    Loan amounts typically range from ₹1 lakh to ₹10 crore, depending on the business profile, turnover, and collateral offered.

    Banks offer both secured and unsecured machinery loans.
    Secured loans require collateral (like property or machinery), while unsecured options are available for businesses with strong credit history.

    • Business registration certificate
    • GST & PAN details
    • Bank statements (6–12 months)
    • Financial statements
    • Machinery quotation or invoice
    • KYC of business owner

    Tenures generally range between 1 to 7 years, depending on the loan amount and the borrower’s repayment capacity.

    Yes. MSMEs can apply under CGTMSE, PMEGP, and Mudra Yojana schemes for low-interest or collateral-free machinery loans.