The machine secures its own loan.
Term finance for plant and machinery — production equipment, CNC and processing machines, packaging lines, generators and material-handling equipment — new or used, domestic or imported, hypothecated against the asset itself.
Tenure against useful life, always
Machinery finance is priced and tenured against the asset's productive life. A mainstream machine with an active secondary market — standard CNC, packaging lines, generic processing equipment — attracts 75–85% funding. A specialised, single-use machine with thin resale attracts less.
Used and imported machinery is financeable at 60–75%, subject to a residual life certificate from the OEM or an authorised inspection agency, and over a shorter tenure than new equipment. Confirm spares and service availability in India for the specific model before committing — a validated purchase you cannot get serviced is a real operational risk.
Installation, commissioning and any required utility upgrade (power, compressed air, cooling) are legitimate project costs that belong in the funding request. Machines financed without their utility requirement stall at commissioning, not at credit approval.
Indicative pricing in 2026
Machinery finance prices well because the asset is the security. OEM-tied finance schemes occasionally beat these open-market bands.
Public Sector Banks
Tier-1 Private Banks
NBFCs & HFCs
Machinery finance done well
Check the OEM finance scheme first
Major equipment manufacturers frequently run subvented or structured finance programmes that beat open-market bank rates, particularly for domestic machine tools and processing equipment. Get the OEM quote in writing before assuming a bank loan is the only route.
Used and imported needs a certified life
A residual life certificate from the OEM or an authorised inspection agency is close to mandatory for used imported machinery. Skipping this step to save time typically costs more later when the lender's own inspection raises the same question mid-process.
Fund the utility upgrade with the machine
A new line often needs more power, better earthing, compressed air or cooling capacity. Financing the machine alone and discovering the utility gap at installation is one of the most common and most avoidable delays in this category.
Documents required
Incomplete files cause most multi-week delays. We assemble the full set upfront, in the order credit teams read it.
KYC & constitution
- PAN & Aadhaar of all promoters / partners / directors
- Certificate of incorporation, MOA-AOA or partnership deed
- Board resolution or partners' authority letter
- GST registration & trade licence
Financials
- 3 years ITR with computation of income
- Audited balance sheet, P&L and schedules
- 12 months' bank statements of all operating accounts
- GST returns for the last 12 months
- Existing loan sanction letters & repayment track record
Machinery
- Final quotation or purchase order with technical specification
- Residual life certificate, for used or imported equipment
- Import documentation and LC requirement, if applicable
- Site readiness and utility capacity confirmation
Related facilities & deep-dive guides
Every facility below is placed through the same 80+ lender panel. The long-form guides carry the working numbers, worked examples and lender-by-lender detail.
Frequently Asked Questions
The questions our advisory desk is asked most often about Machinery & Equipment Loan.
Yes, at 60–75% for domestic used equipment and 55–70% for used imports, subject to a residual life certificate confirming the machine has enough useful life left to outlast the loan tenure.
Check spares and service support for that specific model in India before committing — financing the machine is only half the picture.
Match it to the machine's productive life, typically three to seven years for mainstream industrial equipment. Stretching tenure to lower the EMI usually means servicing debt against a declining-value or technologically superseded asset in the later years.
Shorter tenure with a higher EMI, matched to actual useful life, is the more disciplined structure.
Usually yes, when presented as part of the machinery cost rather than as an afterthought. Installation, commissioning and necessary utility upgrades are legitimate project costs.
Machines financed without their utility requirement — power, compressed air, cooling — commonly stall at commissioning, which is avoidable by scoping the whole installed cost upfront.
The core mechanics are similar, but imports usually involve a letter of credit, customs duty and clearing, and currency exposure between order and payment — each of which affects landed cost and timing.
See trade and export finance for how the import leg is normally structured alongside the machinery loan.
Yes, either as a fresh machinery facility hypothecated against the new asset, or, if you have an existing property-secured facility with headroom, via a top-up.
Which is cheaper depends on your existing security and conduct record; we model both before recommending one.
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