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Updated August 2026

Equipment Finance up to Rs 25 Crore for IT, Medical, Kitchen & Industrial Equipment

Purchase business equipment with 10%-25% down payment. Equipment itself is the security. Rates from 9% p.a. 3-7 year tenure aligned to equipment useful life. Manufacturer-tied schemes for HP, Cisco, Siemens, GE, Philips available.

Rs 25 CrMax Loan
9%+Interest
3-7 YearsTenure
85%-90%LTV
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What is Equipment Finance

Equipment Finance Explained

Equipment Finance is a term loan specifically designed to purchase business equipment - the equipment being financed serves as primary security through hypothecation. It covers a wide range: IT hardware (servers, workstations, laptops, networking equipment), medical equipment (MRI, CT scanners, X-ray, dental chairs), commercial kitchen equipment (ovens, refrigeration, dishwashers), office equipment (photocopiers, projectors), industrial machinery, and specialised sector equipment (retail POS, F&B, hospitality).

The core value proposition is capital preservation. Rather than paying Rs 20 lakh upfront for a CT scanner (draining your working capital), Equipment Finance lets you pay 15%-25% down (Rs 3-5 lakh) and structure the rest as monthly EMIs over 5-7 years. Meanwhile, the equipment starts generating revenue immediately - CT scans, IT services delivered, product manufactured, dishes served. The equipment finances its own EMI from the revenue it generates.

India\'s Equipment Finance market has expanded rapidly with three trends: (1) NBFC specialisation - Bajaj Finance, Poonawalla, Cholamandalam offering digital medical + IT equipment finance in days, not weeks. (2) Manufacturer-tied schemes - HP Financial, Cisco Capital, Siemens Financial, GE Healthcare offering subsidised finance bundled with equipment sale. (3) CGTMSE coverage - MSME equipment loans up to Rs 5 crore get government-guarantee backing, unlocking collateral-free bank finance at preferential rates.

Equipment Categories

6 Categories of Equipment We Finance

IT Hardware

Servers, workstations, laptops, networking, storage. HP / Cisco / Dell captive schemes at 8.50%+.

Medical Equipment

MRI, CT, X-ray, ultrasound, dental chairs, ICU beds. Specialised healthcare finance at 9%+.

Commercial Kitchen

Ovens, refrigeration, dishwashers, cold rooms for restaurants, hotels, cloud kitchens.

Office Equipment

Photocopiers, printers, projectors, VC systems, HVAC. Xerox / Ricoh / Canon tied schemes.

Industrial & Light Machinery

Packaging, testing, quality control, small manufacturing setups.

Retail & POS

POS systems, retail refrigeration, display cabinets, inventory scanners.

Key Features

Why Choose Equipment Finance

Preserve Working Capital

Only 10%-25% down. Rest via EMI. Free up cash for inventory + operations.

Equipment as Security

No property collateral typically needed. Equipment itself is hypothecated.

OEM Subsidised Rates

Manufacturer-tied schemes from HP, Cisco, Siemens, GE start at 8.50% - below bank rates.

Aligned to Equipment Life

5-7 year tenure matches equipment useful life + depreciation cycle.

Double Tax Benefit

Interest deducted under Sec 37(1) + accelerated depreciation on equipment under Sec 32.

Fast Disbursal

Digital NBFC schemes: 3-7 days. Direct disbursement to equipment vendor.

CGTMSE Coverage

MSME equipment loans up to Rs 5 crore government-guaranteed. Preferential rates.

Ownership from Day 1

Unlike leasing, you own the equipment. Full depreciation benefit + resale value.

Eligibility

Equipment Finance Eligibility

Business Vintage

2-3 years for banks. 1-2 years for NBFCs. Medical / IT startups accepted with strong CIBIL.

Annual Turnover

Rs 40 lakh+ for bank equipment finance. Rs 20 lakh+ for NBFC. Rs 10 lakh+ for OEM captive.

CIBIL Score

700+ preferred. 650+ with margin money 30%+ or personal guarantee. 750+ unlocks best rates.

Margin / Down Payment

10%-25% for new equipment. 25%-40% for used. Higher margin = better rate.

GST + Udyam

Both mandatory. MSME status unlocks CGTMSE + priority-sector benefits.

Sector Relevance

Equipment must be relevant to your business - lender verifies use case + revenue generation potential.

Documents

Documents Required

Borrower KYC + Business Documents
PAN + Aadhaar of proprietor/directors. Business PAN. GST Registration + Udyam Registration. Constitution documents (partnership deed / MOA-AOA). Business address proof. Board resolution for equipment purchase + loan (if company).
Financial Documents
2-3 years audited P&L + Balance Sheet + ITR. 12-24 months current-account bank statements. Latest GSTR-1 + GSTR-3B filings. Debtor + creditor list. Personal ITR of proprietor / promoters.
Equipment-Specific Documents
Proforma invoice / quotation from equipment vendor. Technical specifications sheet. Vendor GST registration + PAN. Delivery + installation timeline. Post-purchase: original tax invoice, delivery challan, installation certificate, insurance policy (in lender\'s favour).
Additional (Case Dependent)
For medical equipment: doctor\'s registration (MCI / State Medical Council), practice license, hospital / clinic license. For CGTMSE coverage: CGTMSE application form, guarantor consent. For OEM captive schemes: manufacturer\'s tie-up reference, equipment configuration approval.
Top Lenders

Best Equipment Finance Lenders

Bajaj Finance
Largest NBFC for medical + IT equipment finance. Fast digital process. Strong doctor / clinic focus.
Rate10.50% - 15.50%
MaxRs 20 Cr
HDFC Bank
Comprehensive equipment finance across sectors. Specialised healthcare finance desk. Fast bank approvals.
Rate9.50% - 13.50%
MaxRs 25 Cr
Poonawalla Fincorp
Strong doctor + clinic equipment loans. Excellent for chartered accountants + architects too.
Rate10.00% - 14.50%
MaxRs 5 Cr
Cholamandalam
Established equipment + medical finance portfolio. Good for tier-2 city businesses.
Rate10.50% - 14.50%
MaxRs 10 Cr
SBI Equipment Finance
Best for CGTMSE-covered MSME equipment loans. Preferential PSU rates. Strong industrial equipment portfolio.
Rate9.15% - 13.00%
MaxRs 25 Cr
L&T Finance
Industrial + construction equipment focus. Strong for capex-heavy manufacturing MSMEs.
Rate10.00% - 14.00%
MaxRs 15 Cr
Interest Rates

Equipment Finance Rates (August 2026)

Equipment TypeRate (p.a.)Typical LTVBest Lender Category
IT Hardware (Servers, Workstations)8.50% - 12.00%85%-90%OEM captive (HP, Cisco, Dell)
Medical Equipment (Established doctors)9.00% - 13.00%80%-90%Bajaj, HDFC Healthcare
Medical Equipment (New clinics)11.00% - 15.00%70%-80%NBFCs, OEM captive
Commercial Kitchen10.50% - 14.50%75%-85%NBFCs, HDFC F&B finance
Office Equipment (Xerox, printers)10.00% - 13.00%85%-90%OEM captive, banks
Industrial / Light Machinery9.15% - 13.50%75%-85%SBI (CGTMSE), L&T Finance
Used / Refurbished Equipment11.50% - 16.00%60%-70%NBFCs (specialised)
Application Process

How Equipment Finance Works

1

Vendor Selection

Select equipment vendor. Get proforma invoice.

2

Loan Application

Apply with borrower + equipment docs.

3

Underwriting

Lender assesses borrower + equipment resale value.

4

Sanction

Loan sanctioned with terms + margin money confirmed.

5

Disbursement

Loan disbursed directly to vendor. You pay margin.

6

Delivery + EMI

Equipment delivered + installed. EMIs begin.

Pros & Cons

Is Equipment Finance Right for You?

Advantages

  • Preserve working capital (only 10-25% down)
  • Equipment itself is the collateral
  • OEM captive schemes at 8.50%+ rates
  • Tenure matches equipment useful life
  • Double tax benefit (interest + depreciation)
  • CGTMSE coverage for MSMEs up to Rs 5 Cr
  • Ownership from Day 1 (unlike leasing)
  • Digital NBFC process - 3-7 day disbursal

Trade-offs

  • Equipment must have resale value
  • Used equipment has stricter LTV (60-70%)
  • Margin money required upfront
  • Cannot sell equipment during loan tenure
  • Insurance mandatory (lender is beneficiary)
  • Rate higher than pure secured business loans
Comparison

Equipment Finance vs Machinery Loan vs Equipment Leasing

FeatureEquipment FinanceMachinery LoanEquipment Leasing
OwnershipBorrower owns Day 1Borrower owns Day 1Lessor owns; borrower rents
ScopeAll business equipmentIndustrial machinery onlyAll equipment types
Down Payment10%-25%15%-25%Zero / nominal
Tenure3-7 years3-7 years2-5 years (typically)
Interest / Rental9%-15% (interest)9%-15% (interest)Rental (blended cost 12%-16%)
Tax BenefitInterest + depreciationInterest + depreciationFull lease rental deductible
End of TermOwn it outrightOwn it outrightReturn / renew / buy at residual
Best ForOwning productive assetsHeavy manufacturingFast-obsolete equipment (IT)
20 Questions

Equipment Finance - Frequently Asked Questions

What is Equipment Finance?
Equipment Finance is a term loan specifically designed to purchase business equipment. The equipment being financed serves as primary security (hypothecation). It covers IT hardware (servers, laptops, workstations), medical equipment (MRI, CT scanners, dental chairs), kitchen equipment (commercial ovens, refrigeration), office equipment (photocopiers, projectors), industrial machinery, and any productive asset above Rs 1 lakh. Rates 9%-15% depending on equipment type + borrower profile.
How is Equipment Finance different from a Machinery Loan?
Both are similar in structure but differ in scope. Machinery Loan is traditionally used for heavy manufacturing / industrial machinery (CNC machines, injection moulding, packaging lines). Equipment Finance is broader - covers all productive business equipment including IT, medical, kitchen, office, and lighter machinery. Rates + tenure similar. In practice, most lenders use both terms interchangeably.
What types of equipment can be financed?
Almost any productive business equipment: (1) IT hardware - servers, workstations, laptops for teams, networking equipment. (2) Medical - diagnostic equipment (MRI, CT, X-ray, ultrasound), dental chairs, hospital furniture. (3) Kitchen - commercial ovens, dishwashers, cold rooms for restaurants/hotels. (4) Office - photocopiers, printers, projectors, video conferencing. (5) Industrial - light machinery, packaging, testing, quality equipment. (6) Retail - POS systems, refrigeration for stores. Basically any equipment above Rs 1 lakh with resale value.
What is the interest rate on Equipment Finance?
Bank Equipment Finance: 9.00% - 13.50% p.a. NBFC Equipment Finance: 10.50% - 15.50%. Manufacturer-tied schemes (e.g., HP Financial, Cisco Capital, Siemens Financial): 8.50% - 12% (often subsidised by manufacturer). Medical equipment financing (specialised): 9.00% - 13% for established doctors/hospitals. Rates depend on: equipment resale value, borrower credit profile, tenure, LTV requested.
What is the maximum loan amount for Equipment Finance?
Rs 5 lakh minimum typically. Rs 25 crore maximum from banks. For very large industrial equipment (e.g., aircraft, ships, power plants), specialised project finance / equipment leasing routes are used. LTV ratio: typically 75%-90% of equipment invoice value; you contribute 10%-25% as margin/down payment.
What is the tenure of Equipment Finance?
3-7 years typically. Depends on equipment useful life: IT hardware 3-4 years, office equipment 3-5 years, medical equipment 5-7 years, industrial machinery 5-7 years. Lender aligns tenure to equipment depreciation lifecycle. Longer tenure lowers EMI but slightly increases rate.
Do I need collateral beyond the equipment?
For smaller Equipment Finance (up to Rs 25 lakh): equipment hypothecation is usually sufficient. For larger amounts (Rs 25 lakh - Rs 2 crore): personal guarantee from promoters typically required. For very large equipment (Rs 2 crore+): additional collateral (property, FD, or corporate guarantee) may be required. CGTMSE coverage available for MSME equipment loans up to Rs 5 crore - no additional collateral.
What are the eligibility criteria for Equipment Finance?
Business vintage: 2-3 years typically. 1 year acceptable for medical professionals or IT businesses with strong CIBIL. Annual turnover: Rs 40 lakh+ for banks; Rs 20 lakh+ for NBFCs. CIBIL 700+ preferred. GST registration mandatory. Business must be in sector using such equipment (relevance of equipment to business documented). Own contribution / margin money: 10%-25% of equipment cost.
What is the down payment (margin) requirement?
Standard margin: 15%-25% of equipment invoice value. New equipment from OEMs (Original Equipment Manufacturers) with resale market: 10%-15% margin (lender gets 85%-90% LTV comfort). Used equipment: 25%-40% margin (lower LTV due to depreciation). Medical + IT equipment with tight resale markets: sometimes only 10% margin. Higher margin gets you better rate.
Are there manufacturer-tied Equipment Finance schemes?
Yes - many equipment manufacturers offer captive or tied financing at subsidised rates: HP Financial Services (IT equipment), Cisco Capital (networking), Siemens Financial (industrial + medical), IBM Global Financing (enterprise IT), Xerox / Ricoh (office equipment), Dell Financial, Bajaj Auto Finance (commercial equipment). These schemes often bundle warranty + maintenance + finance at attractive combined rates.
Can I finance used / second-hand equipment?
Yes but with stricter terms: LTV 60%-70% (vs 85%-90% for new). Higher rates by 100-200 bps. Age restrictions - equipment must be under 5-7 years old typically. Certified refurbished equipment from OEM channels gets better terms than open-market used equipment. Independent valuation may be required for used equipment above Rs 10 lakh.
What documents are needed for Equipment Finance?
One-time: PAN + Aadhaar of proprietor/directors, business PAN, GST + Udyam, 2-3 years ITR + audited financials, 12-24 months bank statements, constitution documents. Per equipment: equipment proforma invoice / quotation from vendor, technical specifications, purchase order, delivery + installation plan. Post-purchase: original invoice + delivery challan + installation certificate.
Is CGTMSE coverage available for Equipment Finance?
Yes - MSME Equipment Finance is fully eligible for CGTMSE coverage up to Rs 5 crore. This means: no separate collateral required (equipment hypothecation is enough), preferential PSU bank rates, priority-sector benefits. CGTMSE annual fee: 0.75% - 2% of loan amount. Coverage extension: 75%-85% guarantee to the lender.
What is the difference between Equipment Loan and Equipment Leasing?
Equipment Loan: you own the equipment from day 1, pay EMIs, claim depreciation. Equipment Leasing (Operating Lease): you rent the equipment, monthly lease payments, lessor owns it. Financial Lease: like a loan but structured as lease with buyback at end. Leasing preserves working capital and gives full tax deduction on lease rentals; ownership gives depreciation benefits.
Is Equipment Finance interest tax-deductible?
Yes - all interest paid on Equipment Finance is fully deductible under Section 37(1). Additionally, you claim depreciation on the equipment (usually accelerated depreciation for productive assets under Section 32). Combined, the effective post-tax cost of Equipment Finance is often much lower than the headline interest rate suggests.
Can startups get Equipment Finance?
Yes - especially for medical, IT, and F&B startups. NBFCs and manufacturer-tied schemes are more startup-friendly than banks. Requirements: at least 1 year of business operations, strong founder credit profile (CIBIL 750+), higher margin money (25%+), personal guarantee. Medical startups (new clinics, dental practices) get specialised startup-friendly equipment finance.
Which lenders are best for medical equipment finance?
HDFC Bank Healthcare Finance - specialised medical equipment loans up to Rs 20 crore. Bajaj Finance - fast digital medical equipment loans. Poonawalla Fincorp - strong doctor / clinic focus. Cholamandalam - established medical equipment portfolio. ICICI Bank Healthcare Finance. Manufacturer-tied: Siemens Healthineers Finance, GE Healthcare Financial Services, Philips Financial.
What is the approval turnaround for Equipment Finance?
Digital / NBFC Equipment Finance: 3-7 working days from application to sanction. Bank Equipment Finance: 10-20 days. CGTMSE-covered bank Equipment Finance: 20-30 days (due to CGTMSE application process). Manufacturer-tied schemes: often fastest (5-10 days) because the manufacturer + lender relationship is pre-arranged.
What are the pre-payment / foreclosure charges?
Floating-rate Equipment Finance: nil foreclosure charges per RBI norms (for individual borrowers) or 2%-4% for corporate borrowers. Fixed-rate: typically 2%-4% of prepaid amount. Manufacturer-tied schemes: often have full foreclosure charges. Read the sanction letter carefully - pre-payment terms vary significantly.
How can MahadevX help with Equipment Finance?
MahadevX helps you compare equipment finance offers across banks + NBFCs + manufacturer-tied schemes. We identify the best-fit lender based on your equipment type, business vintage, credit profile, and desired LTV. For medical equipment, we have direct access to specialised healthcare finance desks. For IT equipment, we tap into manufacturer captive schemes. Free advisory for borrowers.
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