If you are an entrepreneur or are looking to start a new machinery business, you can easily take a machinery loan. Here, you will find out every information about machinery loan from machinery loan without security to machinery loan interest rates.
Equipment loans are a type of financial aid for MSMEs, startups, or bigger businesses for the sole purpose of funding their machinery.
The loan can be utilized to either purchase new equipment, upgrade older equipment, or repair existing equipment.
If you are searching for a machinery loan without security, there is good news for you! Machinery finance is a collateral-free loan in most cases, as the equipment that is funded itself acts as the asset which can be pledged.
Do you want to know if you can get a subsidy on machinery loans? Read ahead to know more.
Most MSME loans or startup loan schemes rolled out by the Government of India can be utilized for machinery financing, or as a machinery loan. And there are many government schemes for getting easy MSME loans at low interest rates without the need to pledge any collateral.
As machinery loans are not technically collateral-free or unsecured loans, entrepreneurs can expect to get loans at better terms.
But it is to be noted that MSME loan schemes rolled out by the government do not have a subsidy on the interest rate. They are easier to get and have lower interest rates, as compared to most commercial business loans.
Here are some examples of loan schemes by the government which can be used as machinery loan for startup or any business -
The eligibility criteria for machinery loan for new business tend to vary a little from the eligibility criteria for machinery loan for MSMEs that have been running for a few years.The following are the general eligibility criteria for machinery loan -
The document requirement varies depending on the lender and the scheme, but here are the general documents that are required -
There are two ways to apply for an equipment loan - online and offline. Let us look at them one by one.
Here are the steps you can follow to apply for a machinery loan right from the comfort of your home -
STEP-1: Visit the official website of the bank or the NBFC you have chosen to take the loan from.
STEP-2: Locate the section on ‘Retail Products’ → ‘Loans’ → ‘Machinery Loans’.
STEP-3: Click on ‘Apply now’ and follow the step by step guidelines provided by the website.
STEP-4: Upload scanned copies of documents wherever necessary and click on ‘Submit’ when you have completed the application.
STEP-5: Once your application and documents are approved, the bank executives will contact you to continue with the loan procedure.
STEP-6: After the procedure has been completed, the funds will be disbursed to your business bank account within a few working days.
Please follow these steps to apply for a machinery loan through the offline process -
STEP-1: Visit the nearest branch of the bank or the NBFC you have chosen to take the loan from.
STEP-2: Take all required documents with you, and request for a form for the Application of Machinery Loan.
STEP-3: Fill in the form carefully, attach the documents with it, and submit it to the respective loan executive.
STEP-4: The bank will verify the documents and your application.
STEP-5: Once the approval process is over, the funds will be disbursed to your business bank account within a few working days.
There are many banks and NBFCs that provide easy machinery loans for businessmen. Here are a few of them -
|Name of Bank / NBFC||Amount||Interest Rate||Processing Charges|
|Tata Capital||Rs.0.40 Lakh - Rs.75 Lakh||15% onwards||2.50%|
|HDFC Bank (Commercial Construction Equipment Financing & Loan)||As per requirement||7.50% - 14.93% per annum||1-1.5%|
|Axis Bank||As per requirement||9% - 14.50% per annum||0.30% or Rs.10,000/- whichever is less|
|Bandhan Bank (Commercial Vehicle and Construction Equipment Loan)||Rs.1 Lakh - Rs.5 Crore||Contact the bank branch for details||Up to 1%|
|Bajaj Finserv||Up to Rs.50 Lakh||9.75% - 30% per annum||3.54%|
|LendingKart||Rs.50,000 - Rs.2 Crore||1% - 2% per month||2%|
|Kotak Mahindra Bank||As per requirement||Up to 24%||Up to 3%|
Note: Please note that the rates are subject to change periodically.
Other than these specific loans, almost all MSME or business loans offered by banks and NBFCs can be used for the purchase of equipment. You can take a look at the business loans offered by banks here.
For any industry or business that is dependent on machines, upgrading them comes as a huge responsibility and challenge. Often with advancement in technology, perfectly good machinery needs to be upgraded to keep the business afloat. In such cases machinery loans or equipment loans are a great option.
Any business loan or MSME scheme can also be utilized for the purchase, repair, or upgradation of machinery. Almost all banks offer business loans for upcoming entrepreneurs and existing businessmen.
Apart from this, if you are ever in need of urgent funds, you can always rely on moneyview personal loans. You can get loans up to Rs.5 Lakh without any collateral. To check your eligibility, visit our website or download the moneyview app.
If you were searching for ‘machinery loan interest rate’, it varies on a variety of factors like your CIBIL score, your business experience, income, etc. The interest rates on machinery loans range from 7.50% to 30% per annum.
Applying for a ‘machinery loan for new business’ is a very easy and hassle-free process. You can apply both online and offline with the required documents and your business plan.
Funds from almost all business and MSME loans can be utilized to purchase machinery or equipment. You just have to furnish the details of the machinery to be procured along with the quotation from suppliers.
Technically, there is no subsidy on machinery loans or MSME loans from the government. Even government schemes do not offer subsidized interest rates. But they do offer quick, collateral free, and affordable interest rates for the benefit of the entrepreneur.
Yes, you can easily get a machinery loan without security. While taking an equipment loan, the machinery acts as the collateral or asset that is pledged, and thus you seldom need any extra security for such loans.
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