What Are Machinery Loans for Manufacturing?

Machinery loans are specialized business loans designed to finance the purchase or upgrade of manufacturing equipment, such as CNC machines, assembly lines, or industrial tools. Loanpao helps Indian manufacturers secure these loans in 2025 to boost productivity.

Benefits of Machinery Loans

Key advantages for manufacturers in 2025:

  • Enhanced Productivity: Modern equipment increases efficiency and output.
  • Tax Benefits: Depreciation on machinery can reduce taxable income.
  • Flexible Repayment: Loan tenures from 1–7 years for affordability.
  • Competitive Rates: Interest rates typically range from 9–15% p.a.
  • Scalability: Supports business expansion and technological upgrades.

Eligibility Criteria for Machinery Loans

Common requirements in 2025:

  • Business Age: Minimum 2–3 years of operations.
  • Turnover: Annual turnover of ₹50 lakh or more.
  • Credit Score: Preferably 700+ for businesses or owners.
  • Collateral: May require machinery or property as security for larger loans.
  • Documentation: KYC, business financials, and machinery cost estimates.

Machinery Loan Comparison

Typical terms from top lenders in 2025:

Lender Type Interest Rate Loan Amount Tenure Processing Fee
Banks 9–12% p.a. ₹5 lakh–₹5 crore 1–7 years 0.5–1% of loan amount
NBFCs 12–15% p.a. ₹2 lakh–₹2 crore 1–5 years 1–2% of loan amount

How to Apply for a Machinery Loan with Loanpao

Steps to secure financing:

  1. Identify Equipment Needs: Determine the machinery required for manufacturing.
  2. Check Eligibility: Verify business turnover, credit score, and documents.
  3. Calculate EMIs: Use Loanpao’s EMI Calculator to plan payments.
  4. Compare Lenders: Review offers on Loanpao’s platform.
  5. Submit Application: Apply via Loanpao’s application page with documents.

Tips for Choosing the Best Machinery Loan

Maximize your loan benefits:

  • Compare Rates: Seek the lowest interest rates and minimal fees.
  • Assess Equipment Value: Ensure loan amount aligns with machinery costs.
  • Explore Govt. Schemes: Check for subsidies under schemes like MSME or Make in India.
  • Negotiate Terms: Use Loanpao to negotiate better rates or tenures.
  • Plan Cash Flow: Ensure EMIs fit within business revenue projections.

Frequently Asked Questions

They can finance the purchase or upgrade of manufacturing equipment like CNC machines or assembly lines.

Most are secured, requiring collateral like the machinery itself or other assets.

Up to ₹5 crore, depending on the lender and business eligibility.

Yes, businesses can claim depreciation on machinery to reduce taxable income.

Loanpao offers lender comparisons, EMI calculators, and expert application support.

KYC, business financials, machinery cost estimates, and proof of business operations.

How to Get Started with Loanpao

Finance your manufacturing equipment with Loanpao:

  1. Identify the machinery needed for your manufacturing business.
  2. Use Loanpao’s EMI Calculator to budget EMIs.
  3. Compare lender offers on Loanpao’s platform.
  4. Apply via Loanpao’s application page with expert guidance.

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