MSME & Commercial

Machinery Loan & Equipment Finance

Term loans to buy production machinery, medical equipment and plant assets, repaid from the income they generate.

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Workers processing textiles in a manufacturing plant

SecurityHypothecation of machinery

Security: Hypothecation of machinery
Your contribution: Margin set by the lender
Repayment: EMIs, moratorium possible*
Lenders compared: 40+ banks & NBFCs

What is machinery and equipment finance?

Machinery finance is a term loan to buy a specific asset for your business, such as a CNC machine, a packaging line, an ultrasound machine or a generator set. The asset is hypothecated to the lender until the loan is repaid, and the idea is simple: the machine should earn enough to pay for itself over the tenure.

Because the loan is backed by a tangible asset and linked to a clear purpose, it is often easier to justify to a lender than an unsecured loan of the same size.

How a machinery loan is structured

Lenders fund a share of the machine's cost and ask you to pay the rest as margin money. As an illustration, on a machine costing ₹30 lakh, a lender funding 80% would lend ₹24 lakh, with ₹6 lakh coming from you. The share funded varies by lender, machine type and your business profile.

A few points that often come up:

GST on the invoice. Registered businesses can usually claim input tax credit on capital goods, so some lenders fund only the pre-GST value. Check this before you plan your margin.
Installation and freight may or may not be included in the funded amount.
Imported machinery may involve a letter of credit to the overseas supplier, which needs separate trade finance limits.
Insurance on the machine must stay in force through the tenure.

Loan or lease?

	Machinery loan	Equipment lease
Ownership	Your business	The lessor
Depreciation claimed by	You	The lessor
Upfront payment	Margin money	Usually lower
End of term	Machine is yours	Return, renew or buy, as per the lease

A loan suits equipment you will use for its full working life. A lease can suit technology that goes out of date quickly.

Things to compare before you choose

Total cost, including processing fee, insurance and stamp duty, not just the EMI.
Tenure against the machine's earning life. Repaying over a period longer than the machine's useful life leaves you paying for an idle asset.
Moratorium terms during installation and how interest is treated in that period.
Collateral and guarantee demands, which differ widely across lenders.

Our team compares offers from 40+ banks and NBFCs and coordinates between you, the supplier and the lender until the machine is installed and funded.

Who is it for?

Manufacturers adding capacity or replacing old machines
Doctors, hospitals and diagnostic centres buying medical equipment
Job-work units and fabricators taking on larger orders
Printing, packaging, food-processing and textile units upgrading technology
Contractors buying equipment for their projects

Key features

Funding tied to the asset

The machine you buy is the primary security. The lender's charge is recorded through hypothecation, and ownership stays with your business.

Payment straight to the supplier

Once the loan is sanctioned and you have paid your margin, the lender normally pays the supplier against the invoice.

Medical equipment finance

Several lenders run dedicated programmes for doctors and healthcare providers, assessed on qualification, practice and cash flows.

Tenure matched to the machine

Tenure is usually linked to the machine's working life and how quickly it adds to revenue, with a short moratorium possible during installation.

Offers from 40+ banks and NBFCs

We compare how much each lender funds, its collateral needs and its repayment terms, so you can see the trade-offs together.

How Ramasure helps

1
Understand the investment
Your relationship manager notes the machine, supplier, total cost and how the asset will add to your output or revenue.
2
Compare lender offers
We match your project to lenders from our panel of 40+ banks and NBFCs and compare funding share, tenure, collateral and fees.
3
Prepare the file
We help put together the quotation, financials, project note and KYC, and coordinate any site or supplier verification.
4
Sanction and supplier payment
We follow up through sanction and documentation until the lender pays the supplier and the hypothecation is in place.
5
Service through the tenure
We help with insurance renewals on the machine, statements, interest certificates and the final NOC on closure.

Documents & eligibility

Documents you'll need

KYC of the business and its promoters, partners or directors
Proforma invoice or quotation from the machinery supplier
Audited financials and ITR for recent years
Bank statements for the last 6 to 12 months
GST registration and recent GST returns
Project report or note on how the machine will be used, for larger loans
Medical registration certificate, for healthcare equipment loans

Eligibility

Manufacturers, service businesses, contractors and healthcare professionals
Business track record and turnover as required by the lender
Satisfactory credit history of the business and promoters
Machine from a supplier the lender accepts

Costs and risks to understand

Costs to check

Interest rate offered on your profile — compare the APR in the Key Fact Statement
Margin money you pay towards the machine's cost
Processing fee, documentation charges and stamp duty
Insurance on the machine for the loan tenure, with the lender's interest noted
Foreclosure or part-prepayment charges, if any, as per the loan agreement

Risks & things to know

Loan approval, interest rates and terms are at the sole discretion of the lender.
If the machine does not generate the expected output or orders, EMIs still have to be paid.
Lenders may ask for additional collateral or personal guarantees for larger loans or newer businesses.
On default, the lender can take possession of the hypothecated machinery.

Frequently asked questions

Some lenders fund used machinery after an independent valuation and within an age limit for the machine. The funded share and tenure are usually lower than for new equipment.

Yes. Many banks and NBFCs offer equipment loans to doctors, hospitals and diagnostic centres for items such as imaging, dental and lab equipment. They look at your qualification, years of practice and income from the practice.

The machine is usually the main security. For large amounts, imported equipment or new businesses, lenders may also ask for property, deposits or personal guarantees. Some banks offer collateral-free loans to micro and small enterprises under the CGTMSE guarantee scheme.

Yes. Your business owns the machine, so it can claim depreciation as per income-tax rules, and interest on the loan is a business expense. Under a lease, the position is different, so check with your tax professional.

Some lenders allow a short period after disbursal during which you do not pay EMIs, or pay only interest, while the machine is installed and starts production. Interest usually still accrues in this period, so the total cost rises.

Important information

Ramasure is not a lender. Loans are sanctioned and disbursed by partner banks and NBFCs at their sole discretion, subject to eligibility, credit assessment and documentation.
Interest rates, processing fees and other charges are set by the lender and stated in the sanction letter and loan agreement. Rates shown on this website are indicative and may change.
Timely repayment is important: delays can attract penal charges and affect your credit score.
For loans against mutual funds or securities, the lender may sell pledged securities if margin requirements are not met.
Beware of anyone asking for advance fees to “guarantee” loan approval.

Read all disclosures

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Questions about Machinery Loan & Equipment Finance?

Tell us what you need. Your relationship manager will compare suitable options and walk you through every step.