A new machine can raise output, cut costs or let you take on new kinds of work. A machinery or equipment loan spreads the cost over the years the machine earns for you.
What it can fund
- Manufacturing and production machines
- CNC, packaging, printing and processing equipment
- Medical, diagnostic and clinic equipment
- Commercial kitchen, salon or workshop equipment
- Computers, servers and technology for the business
How it usually works
Machinery loans are typically term loans with fixed EMIs over a few years. Some are secured by the machine itself (hypothecation); others are unsecured business loans based on turnover and banking history. Lenders may ask for the supplier's quotation or proforma invoice, and may pay the supplier directly.
Plan it right
- Compare the EMI with the extra monthly cash flow the machine will bring — use the business loan EMI calculator.
- Match the tenure to the machine's useful life — don't still be paying for it after it's replaced.
- Include installation, training and maintenance in your budget.
- Ask about government-supported schemes for MSMEs, such as credit guarantees, through your lender. See the MSME loan guide.
What lenders look at
Business vintage, turnover, banking history, the owner's credit score and the quotation for the machine. Read eligibility and documents.