Introduction to Machinery Loans for Small Businesses

In 2025, machinery loans empower small businesses to acquire advanced equipment, enhancing productivity and competitiveness. Loanpao guides you through financing options for tools and machinery to scale your operations. Apply now to grow your business.

Types of Machinery Loans for Small Businesses

Loan 1: Equipment Purchase Loan

Finances heavy machinery like CNC machines or lathes, offering up to ₹50 lakh at 8–10% p.a.

Loan 2: MSME Machinery Loan

Under MSME schemes, funds up to ₹1 crore at 7–9% p.a. for manufacturing and processing equipment.

Loan 3: Working Capital Equipment Loan

Provides up to ₹25 lakh at 9–11% p.a. for smaller tools and equipment upgrades.

Loan 4: Subsidized Machinery Loan

Supported by schemes like CLCSS, offers up to ₹75 lakh at 6.5–8.5% p.a. with subsidies up to 15%.

Loan 5: Used Equipment Loan

Finances second-hand machinery, up to ₹30 lakh at 10–12% p.a., ideal for cost-conscious businesses.

Comparison of Machinery Loans

Key machinery loans for small businesses in 2025:

Loan Type Loan Amount Interest Rate Tenure Key Feature
Equipment Purchase Loan Up to ₹50 lakh 8–10% p.a. 3–7 years Heavy machinery financing
MSME Machinery Loan Up to ₹1 crore 7–9% p.a. 5–10 years MSME scheme benefits
Working Capital Equipment Loan Up to ₹25 lakh 9–11% p.a. 1–5 years Smaller equipment upgrades
Subsidized Machinery Loan Up to ₹75 lakh 6.5–8.5% p.a. 3–7 years Up to 15% subsidy
Used Equipment Loan Up to ₹30 lakh 10–12% p.a. 2–5 years Second-hand machinery

Note: Eligibility, rates, and subsidies vary by lender and scheme.

Benefits of Machinery Loans

These loans offer:

  • Competitive interest rates (6.5–12% p.a.).
  • Subsidies under schemes like CLCSS (up to 15%).
  • Flexible tenures (1–10 years).
  • Support for both new and used equipment.
  • Collateral-free options for MSMEs (up to ₹25 lakh).

Tips for Applying for Machinery Loans

Maximize your approval chances:

  • Prepare Documentation: Submit business plan, KYC, and equipment quotations.
  • Explore Subsidies: Check schemes like CLCSS for subsidy benefits.
  • Choose the Right Loan: Match needs (e.g., MSME loan for large equipment, used equipment loan for cost savings).
  • Use EMI Calculators: Plan repayments with Loanpao’s EMI calculator.
  • Verify Lender Terms: Compare rates and subsidy eligibility with banks or NBFCs.

Frequently Asked Questions

Loans to fund equipment and machinery purchases to enhance small business productivity.

Yes, schemes like CLCSS offer up to 15% subsidies for eligible MSMEs.

Yes, used equipment loans provide up to ₹30 lakh at 10–12% p.a.

Tenures range from 1–10 years, depending on the loan type and lender.

Submit business plan, KYC, and equipment details to banks or NBFCs via Loanpao.