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Updated August 2026

Machinery Loan up to Rs 10 Crore - Finance New or Used Equipment

Buy the machinery your business needs to grow. New or used, imported or domestic. Rates from 9% p.a. Tenure up to 84 months. Machinery itself as collateral - no property mortgage required for most cases.

Rs 10 CrMax Amount
9%+Interest
84 MonthsTenure
90%LTV New
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What is a Machinery Loan

Machinery Loan Explained

A Machinery Loan is a specialised term loan for purchasing business machinery, industrial equipment, medical devices, IT hardware, commercial vehicles, or any capital equipment needed to run and grow your business. Unlike unsecured business loans where the lender relies on your creditworthiness alone, a machinery loan is secured by the equipment itself - giving you lower interest rates, longer tenure, and higher approved amounts.

In India, machinery loans are offered by PSU banks (with CGTMSE-backed MSME schemes), private banks, specialised NBFCs, and manufacturer-linked financing arms (like Siemens Financial Services, Tata Capital, ABB Financial). Government subsidy schemes such as CLCSS (15% capital subsidy) and TUF (5% interest reimbursement for textile) further reduce your effective cost.

Whether you are a manufacturer buying a CNC machine, a hospital upgrading medical equipment, a printer investing in a digital press, or a restaurant setting up a commercial kitchen, MahadevX matches your equipment purchase to the best-fit machinery financing product across our 100+ empanelled lenders. Our team handles proforma-invoice validation, subsidy applications, and coordinates end-to-end till the funds reach the supplier.

Key Features

Why Choose a Machinery Loan

Machinery as Collateral

The equipment itself is hypothecated - no separate property mortgage needed for most cases.

Rates from 9%

Secured nature keeps rates lower than unsecured business loans by 3%-6% typically.

Tenure up to 84 Months

Longer amortisation reduces monthly EMI burden - manageable cash-flow impact.

90% LTV for New

Only 10%-20% margin from your side for new machinery - preserves working capital.

15% CLCSS Subsidy

Government capital subsidy of 15% for eligible MSME machinery upgradation loans.

Moratorium Available

6-12 month moratorium for installation and commissioning phase - pay only interest initially.

CGTMSE Coverage

Up to Rs 5 crore machinery loans eligible for CGTMSE - government guarantee, no additional collateral.

Depreciation Benefit

15%-40% depreciation on plant & machinery under Section 32 - tax-efficient investment.

New vs Used

New Machinery vs Used Machinery Financing

Both new and used machinery can be financed, but with different terms. Below is a quick comparison to help you decide.

AttributeNew MachineryUsed Machinery
LTV (Loan-to-Value)80% - 90%60% - 75%
Interest Rate9% - 14%11% - 17%
Max TenureUp to 84 monthsUp to 60 months
Valuation RequiredProforma invoiceCertified valuer report mandatory
Age Limit of EquipmentBrand newUp to 5-7 years old typically
InsuranceStandard machinery insuranceComprehensive + higher premium
Government Subsidy (CLCSS)Available (15%)Not typically eligible
Approval Speed10-20 days15-30 days
Eligibility

Machinery Loan Eligibility

Business Vintage

PSU banks: 2 years minimum. Private banks: 3 years. NBFCs: 1 year. First-time buyers can use SIDBI startup schemes.

Annual Turnover

Should be at least 1.5x-2x the loan amount. Rs 50 lakh+ turnover for Rs 25 lakh machinery loan is typical.

CIBIL Score

700+ preferred by banks. 650+ workable with NBFCs. Below 650 - possible via government schemes with additional guarantee.

Udyam + GST

Udyam registration unlocks CLCSS subsidy and MSME rates. GST-registered businesses get faster approval.

Machinery Type

Must be commercial-grade, not personal use. Manufacturer-approved suppliers preferred. Standard equipment easier than custom-built.

Proforma Invoice

Must-have from supplier - includes specifications, model, cost, delivery timeline, warranty terms.

Documents

Documents Required

KYC + Business Registration
PAN + Aadhaar of proprietor/partners/directors. Business PAN. GST registration. Udyam registration (recommended). Shop & Establishment Act License. Constitution documents.
Financial Documents
12 months current-account bank statements. 2-3 years ITR + audited financials (mandatory for companies/partnerships). Existing loan details if any. Projected cash flow post-machinery installation.
Machinery-Specific Documents
Proforma invoice from approved supplier. Machinery specification sheet + model brochure. Dealer credentials + supplier verification. Ancillary equipment list (installation, spares). Site readiness certificate (for heavy machinery).
For Used Machinery
Certified valuation report from lender-empanelled valuer. Machinery age proof (original purchase invoice). Current owner details + hypothecation clearance letter. Physical inspection report. Insurance history and current condition assessment.
For Imported Machinery
Import-Export Code (IEC). Bill of Entry copy. Overseas supplier credentials. Letter of Credit (LC) or wire-transfer arrangement. Marine transit insurance. Customs clearance documents post-arrival.
For CLCSS Subsidy Claim
Application form for CLCSS. Udyam Registration Certificate. Chartered Engineer certificate on technology upgradation. Details of existing machinery being replaced. Subsidy claim submitted through primary lender to Ministry of MSME.
Top Lenders

Best Lenders for Machinery Loans

State Bank of India
Largest PSU machinery lender. Strong CGTMSE coverage. Best for MSMEs upgrading via CLCSS subsidy. SBI SME Machinery Finance product.
Rate9.00% - 14.50%
MaxRs 10 Cr
Bank of Baroda
Strong MSME machinery product. Good for manufacturing sector. Baroda Machine Loan with flexible LTV up to 85% for new equipment.
Rate9.35% - 14.90%
MaxRs 5 Cr
HDFC Bank
Fast private-bank machinery loans. Digital-first for standard equipment. Preferred for GST-registered MSMEs with clean banking.
Rate10.50% - 16.00%
MaxRs 3 Cr
Tata Capital
Strong equipment finance NBFC. Deep sector expertise. Partnership with major machinery manufacturers for pre-approved dealer finance.
Rate11.00% - 17.00%
MaxRs 2 Cr
Siemens Financial Services
Manufacturer-linked NBFC. Best rates on Siemens-brand equipment. Also finances competitor brands. Deep automation industry focus.
Rate10.50% - 15.00%
MaxRs 5 Cr
SIDBI
Government development bank. Special MSME schemes with CLCSS + TUF subsidies. Direct term loans for manufacturing modernisation.
Rate8.15% - 12.00%
MaxRs 25 Cr
Interest Rates

Machinery Loan Interest Rates (August 2026)

CategoryInterest Rate (p.a.)LTVMax Amount
PSU Banks (with CGTMSE)9.00% - 12.50%Up to 85%Rs 5 Cr
PSU Banks (Non-CGTMSE)9.15% - 14.50%Up to 80%Rs 10 Cr
Private Banks10.50% - 16.00%Up to 85%Rs 3 Cr
Top NBFCs11.00% - 17.00%Up to 80%Rs 2 Cr
Manufacturer Financing10.00% - 15.00%Up to 90%Rs 5 Cr
SIDBI Direct + CLCSS8.15% - 11.00%Up to 85%Rs 25 Cr
Used Machinery (all lenders)+2% over new rates60% - 75%Rs 3 Cr
Application Process

How to Apply for a Machinery Loan

1

Get Proforma Invoice

Finalise supplier + machinery specs. Get formal proforma invoice.

2

Enquiry with MahadevX

RM assesses eligibility + suggests CLCSS/TUF subsidy fit.

3

Document Submission

Business docs + proforma invoice + machinery specs.

4

Valuation (if used)

Lender-empanelled valuer inspects the machinery.

5

Sanction

Loan approved + sanction letter with terms.

6

Direct Disbursal

Loan amount paid directly to supplier. Machinery delivered.

Pros & Cons

Is a Machinery Loan Right for You?

Advantages

  • Lower rates than unsecured (secured by machinery)
  • Higher LTV - 80%-90% for new machinery
  • Longer tenure up to 84 months
  • 15% CLCSS subsidy for eligible MSMEs
  • Depreciation tax benefit (Section 32)
  • Moratorium during installation phase
  • CGTMSE-covered up to Rs 5 crore
  • Preserves working capital for operations

Trade-offs

  • Machinery hypothecated - lender can repossess if default
  • Insurance mandatory - adds to cost
  • Slower approval than unsecured (needs valuation)
  • Used machinery has lower LTV
  • Down payment required (10%-40%)
  • Prepayment charges for fixed-rate loans
Comparison

Machinery Loan vs Equipment Finance vs LAP

FeatureMachinery LoanEquipment FinanceLAP for Machinery
OwnershipYou own from Day 1Lender owns till paidYou own; property mortgaged
CollateralMachinery hypothecatedMachinery leasedProperty mortgaged
Interest Rate9% - 17%10% - 18%9% - 14%
Down Payment10% - 30%5% - 15%Nil
TenureUp to 84 monthsUp to 60 monthsUp to 180 months
Max LoanRs 10 CrRs 5 CrRs 25 Cr
Best ForStandard machinery buysFast leasing, low DPVery large capex
Tax BenefitDepreciation + interestLease rent expenseInterest only
20 Questions

Machinery Loan - Frequently Asked Questions

What is a Machinery Loan?
A Machinery Loan is a term loan specifically for purchasing business machinery, industrial equipment, medical devices, IT hardware, commercial vehicles, or any capital equipment used for business purposes. The purchased machinery itself often serves as collateral, keeping interest rates lower than pure unsecured business loans.
What machinery is eligible for a Machinery Loan?
Industrial machinery (CNC, lathes, presses), manufacturing equipment (packaging, assembly), medical devices (ultrasound, X-ray), IT infrastructure (servers, computers), commercial kitchen equipment, printing presses, textile machinery, agricultural equipment, and construction equipment. Both new and used machinery qualify - with different LTV ratios.
What is the maximum Machinery Loan amount?
PSU banks fund up to Rs 10 crore for single-machinery purchases and Rs 100+ crore for full plant setups. Private banks: up to Rs 5 crore. NBFCs: up to Rs 3 crore for standard machinery. SIDBI direct schemes go up to Rs 25 crore for specialised manufacturing MSMEs.
What is the interest rate on a Machinery Loan?
PSU banks: 9%-14% for MSME machinery loans. Private banks: 10.5%-16%. NBFCs: 12%-18%. Government-scheme rates (SIDBI, TUF, CLCSS-subsidised): 8.15%-11%. Rates depend on your business profile, CIBIL, industry, and whether the machinery is new or used.
Can I finance used machinery?
Yes - most lenders finance used machinery up to 5-7 years old. However, LTV (Loan-to-Value) is lower: typically 60%-70% of used machinery value vs 80%-90% for new. Vintage machinery (10+ years) is harder to finance. A certified valuation report is required for used equipment.
What is the LTV ratio for Machinery Loans?
For new machinery: 80%-90% of invoice value. For used machinery: 60%-75% of valuation. For imported machinery: 70%-80% including CIF value + customs duty. Higher LTV possible with strong CIBIL and additional collateral.
What is the tenure for a Machinery Loan?
Standard tenure: 3-7 years (36-84 months). Heavy industrial machinery with long useful life: up to 10 years. Short-life equipment (IT, medical): 3-5 years. Moratorium of 6-12 months often available for the installation/commissioning phase.
What is the CLCSS Scheme for Machinery Loans?
Credit Linked Capital Subsidy Scheme - a Ministry of MSME programme providing 15% upfront capital subsidy on machinery loans up to Rs 1 crore for MSMEs upgrading technology. Applies to specific approved sectors and machinery types. Reduces effective loan amount and EMI significantly.
What is the TUF Scheme?
Technology Upgradation Fund Scheme - specifically for the textile industry. Provides 5% interest reimbursement plus 15% capital subsidy on machinery loans for technology upgradation. Available via SIDBI and textile-specialised banks.
Do I need collateral beyond the machinery itself?
Usually no - the machinery being purchased is hypothecated as primary security. For loans above Rs 50 lakh, some lenders may ask for additional collateral (property, FD, personal guarantee). CGTMSE-covered machinery loans up to Rs 5 crore need no additional collateral.
What documents are required for a Machinery Loan?
Standard business documents (PAN, GST, Udyam, ITR, bank statements), plus machinery-specific: proforma invoice from supplier, machinery specifications, dealer credentials, list of ancillary equipment, installation quote, and (for imported machinery) IEC + BOE + customs clearance documents.
How long does Machinery Loan approval take?
PSU banks: 15-30 working days (including machinery valuation and inspection). Private banks: 10-20 days. NBFCs: 5-15 days for standard equipment. Fast-track NBFC digital-machinery loans: 5-7 days for small-ticket standard equipment.
Can I get a Machinery Loan for imported equipment?
Yes - most lenders finance imported machinery. The loan covers CIF value plus customs duty. Additional documents: Import License (IEC), Bill of Entry, LC/direct-payment arrangement, insurance during transit. Loan disbursed to supplier directly against invoice + BOE.
Which banks offer the best Machinery Loans?
For lowest rates: SBI, PNB, Bank of Baroda (PSU + CGTMSE). For fast unsecured up to Rs 30 lakh: Bajaj Finance, Poonawalla. For manufacturer-financing (Siemens, ABB equipment): Siemens Financial Services, Tata Capital. For textile: SIDBI + TUF-empanelled banks.
What is the difference between a Machinery Loan and Equipment Finance?
Machinery Loan is a broader term - a term loan for buying any business equipment. Equipment Finance is a specific product where the lender finances the equipment purchase and remains the legal owner until you complete payment (similar to hire-purchase). Equipment finance often has lower down-payment and simpler underwriting.
Can I prepay my Machinery Loan?
Yes - after the initial lock-in period (6-12 months). For floating-rate machinery loans - nil prepayment charges (RBI mandated). For fixed-rate: 2%-4% of prepaid amount, often waived after 24 months. Foreclosure charges range from 2%-5% for full closure.
Are Machinery Loan interest payments tax-deductible?
Yes - fully deductible as a business expense under Section 37(1). Additionally, the machinery attracts depreciation benefits under Section 32 - typically 15% for plant & machinery (higher for specific categories like renewable energy at 40%). Combined, this makes machinery investment tax-efficient.
What happens if the machinery breaks down after purchase?
The loan continues - your obligation to repay is independent of the machinery working or not. This is why insurance is typically mandatory - covering fire, theft, breakdown, and accidental damage. Lenders often bundle machinery insurance into the loan agreement.
Can startups get Machinery Loans?
Yes - though harder than established MSMEs. Options: SIDBI Startup India for eligible DPIIT-recognised startups, Mudra Tarun (up to Rs 20 lakh for machinery), Stand-Up India (Rs 10 lakh - Rs 1 crore including machinery), or NBFC startup loans against founder guarantee. Established supplier tie-ups also help.
How can MahadevX help me get a Machinery Loan?
MahadevX matches your machinery type, business profile and industry to the best-fit lender across our 100+ partners. We handle proforma invoice validation, arrange machinery inspection where needed, coordinate CLCSS/TUF subsidy application if eligible, and package the loan for fastest approval. Service is free - lenders pay us on disbursal.
Related

Related Loan Types

MSME Loan CGTMSE Loan Working Capital Term Loan Secured Business Loan Mudra Loan
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