Machinery Loan
Machinery loan is considered a type of business loan that helps startups, entrepreneurs, business owners, self-employed professionals other business entities in acquiring finance to buy new or pre-owned 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 the production or output results in higher profits from sales and distribution.
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हिंदी में पढ़ेUpdated: 24-06-2024 11:16:04 AM
Machinery loan is considered a type of business loan that helps startups, entrepreneurs, business owners, self-employed professionals other business entities in acquiring finance to buy new or pre-owned 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 the production or output results in higher profits from sales and distribution.
- Eligibility Criteria
- Benefits of Machinery Loan
- How to Apply for Machinery Loan?
- Documents Required for Machinery Loan
- Machinery Loan Top Providers
- HDFC Bank
- Lendingkart Finance
- Bank of Maharashtra
- Ziploan
- Flexiloans
Interest rates offered by Banks/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.
Know: What is the average interest rate on a business loan
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Eligibility Criteria
- Applicant’s age must be between 21 years to 65 years at the time of loan maturity
- Business vintage to be minimum of 2 years
- Applicant should not have defaulted on any previous loan or credit card EMIs
- Applicant with good credit score and repayment history
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Benefits
- It helps to buy new equipment/machinery for new or existing business
- Used to refurbish, modify or change existing machinery/equipment
- To repair faulty machines or equipment or to upgrade
- Flexible loan repayment options with easy EMIs
- Machinery loan for startups is an additional benefit for new businesses
- Collateral-free loans from selected NBFCs, Small Finance Banks (SFBs), etc.
Steps to Apply for Machinery Loan – Online/Offline
Machinery loans can be applied via online and offline procedures as mentioned below:
Online Process
Step 1: Applicant needs 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 the submission of the documents, 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 to the mentioned bank account of the applicant
Offline Process
- For offline loan processing, applicants are required to personally visit the bank or financial institution.
- The 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
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Documents Required
- 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
- Business vintage and existence proofs
- Last 2 year’s ITR & 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 lender
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
HDFC Bank
| Commercial Construction Equipment Finance | |
| Avail 100% finance on | Commercial and construction equipment |
| Interest Rack Rate | Varies as per business requirements |
| 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 |
| Service/Documentation Charges | Up to 1% of the loan amount |
*Bank IRR & Annual Percent Rate (APR) offered for loans extended to individual customers.
Lendingkart Finance
| Machinery Loan | |
| Interest Rate | 1% – 2% per month |
| Loan Amount | Rs. 50,000 – Rs. 2 crore |
| One time Processing Fees | 2% of the sanctioned loan amount |
| Repayment Tenure | 1 month to 1 year |
| Part-payment Charges | Nil |
| Pre-closure Charges | Nil |
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TATA Capital
| Machinery Loan | |
| Age Criteria | 25 years – 65 years |
| Interest Rate | 19% p.a. onwards |
| Loan Amount | Rs. 5 lakh – Rs. 75 lakh |
| Repayment Tenure | From 12 months to 36 months |
| Collateral/Security | Not required |
| Business Tenure & Profitability | Minimum 3 years |
| Balance Sheet | Audited by registered CA |
Ziploan
| Equipment Machinery Loans | |
| Business Loan Interest rate | 1% – 1.5% per month (Flat Rate) |
| Loan amount | From Rs. 1 lakh – Rs. 7.5 lakh |
| Processing Fee | 1% – 2% of the sanctioned loan amount |
| Repayment tenure | From 12 months – 36 months |
| Eligibility Criteria | Annual Turnover should be more than Rs. 10 lakh |
| Loan Disbursal Time | Within 3 working days |
| Collateral | Not required |
| Prepayment Charges | Nil after 6 EMis are paid in time |
Flexiloans
| Business Loan for Machinery | |
| Interest Rate | 1% per month onwards |
| Loan Amount | Up to Rs. 1 crore |
| Processing Fee | 2% of the sanctioned loan amount |
| Repayment Tenure | Up to 36 months |
| Monthly business sales | At least Rs. 2 lakh |
| Business experience | At least 12 months |
| Collateral | Not required |
| Loan disbursal time | Within 48 hours after loan approval |
Note: All the above-mentioned interest rates, fees, and charges are subject to change and depend on the sole discretion of the bank, NBFC, and RBI.
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.