Machinery Loan
Finance plant and machinery for expansion, modernisation or new capacity. Compare lender-style options and raise a free enquiry.
Machinery Loan – Overview
A machinery loan funds purchase of industrial or commercial equipment. Lenders assess invoices, business cash flows, GST and banking conduct. It may be structured as term loan, equipment finance or under MSME programmes.
LoanPao helps you compare options and submit an enquiry. Sanction, rate and disbursal always rest with the bank or NBFC.
Check Your Eligibility & EMI
Use the EMI calculator to plan instalments. Final eligibility is decided by the lender after documents and bureau checks.
Top Lenders (Indicative)
Rates and limits change. Verify with the lender before applying.
| Bank / NBFC | Interest Rate | Loan Amount | Tenure | Processing Fee |
|---|---|---|---|---|
| SBI | ~9%–13% p.a. | As per project / invoice | Up to 5–7 yrs | 0.5%–2% + GST |
| HDFC Bank | ~10%–14% p.a. | As per assessment | Up to 5–6 yrs | As per schedule |
| ICICI Bank | ~10.5%–14% p.a. | As per assessment | Up to 5–6 yrs | As per schedule |
| Axis Bank | ~10.5%–14% p.a. | As per assessment | Up to 5–7 yrs | As per schedule |
| SIDBI / MSME channels | Scheme-linked | As per scheme | As per scheme | As per scheme |
*Indicative only. Not a commitment by any lender.
Everything You Need to Know
Eligibility Criteria
| Factor | Common expectation |
|---|---|
| Applicant type | Businesses, MSMEs, professionals with viable operations |
| Age of promoters | Often 21–65 years at maturity (lender-specific) |
| Business vintage | Commonly 1–3+ years; startups face tighter norms |
| Income / turnover | Stable GST / ITR and banking credits |
| Credit score | Promoter CIBIL 700+ preferred; commercial bureau where applicable |
| FOIR / leverage | Existing obligations should leave headroom for new EMI |
| End-use | Invoice / quotation for identifiable machinery |
Documents Required
- KYC of promoters (PAN, Aadhaar)
- Business proof / GST registration
- ITR (often 2 years) and computation
- Bank statements (6–12 months)
- Quotation / proforma invoice for machinery
- Existing loan statements if any
- Partnership deed / MOA-AOA as applicable
Processing Fees & Charges
Processing fees are often about 0.5%–2% of the sanctioned amount plus GST (lender-specific). Documentation, valuation (if any) and prepayment charges vary. Hypothecation of the asset is common.
Application Process
- Share business and machinery requirement on LoanPao
- Compare indicative term-loan / equipment options
- Submit KYC, financials and supplier quotation to lender
- Technical / valuation checks if required
- Sanction, margin payment, then disbursal to supplier or account
FAQs
What is a machinery loan?
A term or equipment loan to buy plant and machinery for business use, usually against invoice and business cash flows.
Is collateral mandatory?
Often the machinery is hypothecated. Additional collateral depends on ticket size and lender policy.
Can a new business apply?
Possible but harder. Most lenders prefer established vintage, GST and banking history.
How much margin is needed?
Lenders may fund a percentage of invoice value; you arrange the balance as margin.
What tenure is common?
Often aligned to asset life — frequently up to 5–7 years subject to policy.
Does GST turnover matter?
Yes. Consistent GST and bank credits improve underwriting confidence.
Can I buy used machinery?
Some lenders allow used equipment with age and valuation conditions.
Is LoanPao free?
Yes. Enquiry and comparison are free.
Will this affect my CIBIL?
A formal application usually creates a hard enquiry.
What delays disbursal?
Incomplete invoices, unclear end-use, weak banking or pending compliance documents.