Machinery / equipment cost
Annual interest rate
Repayment period in years
Monthly EMI
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Total Interest
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Total Payment
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Amortization Schedule
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About Machinery & Equipment Loans
Machinery loans (also called equipment financing or plant and machinery loans) are term loans specifically for purchasing industrial machinery, manufacturing equipment, construction equipment, or other capital assets. Key features:
- The machinery itself typically serves as collateral (hypothecation)
- Tenure is usually aligned with the useful life of the asset (3–7 years)
- Interest rates typically range from 12–16% p.a.
- Down payment of 10–25% is common
For MSME manufacturers, machinery loans may also be covered under government subsidy schemes and the Credit Linked Capital Subsidy Scheme (CLCSS).
Frequently Asked Questions
What documents are required for a machinery loan?
Proforma invoice or quotation from supplier, business financial statements, GST returns, ITR, MSME/Udyam registration, and existing loan statements.
Is GST applicable on the machinery purchase?
Yes, machinery attracts GST (typically 18%). However, businesses registered under GST can claim input tax credit (ITC) on the machinery purchase, effectively reducing the net cost.