Machinery Loan – Get Equipment Finance without Security in India for New Business

October 07, 2021

8 min read

4 Easy Steps To Get Machinery Loan Without Security In India

There are many categories of loans offered by financial institutions in the market today like home loans, car loans, business loans, education loans, etc. The business loan includes various types of loans out of which machinery loan is one category. A machinery loan is a business loan’s that particular category that is obtained for the reason of financing the machinery or equipment purchase needed for running a business. Modern tools of business and the latest up-to-date equipment are, no doubt, very good ways for expanding one’s business, but getting the finance for them can be quite tough at times.

What is a machinery loan?

Hence a machinery loan paves the way for financing of equipment easily and removes any hurdles in getting success for the business. In other words, a machinery loan is regarded as a category of business loan which is very essential for those business entities, entrepreneurs or business owners who are getting financed to purchase machinery/equipment for varied business purposes. Such financial help for machinery purchase assists business owners in achieving more productivity with the help of newly purchased machinery and equipment. As we all know, increased output or production thereby results in an increase in profits as well from distribution and sale.

Eligibility Criteria for Machinery Loan

Applicant age must be within 21- 65 years in order to be eligible for applying for a loan for machinery.
Business should be at least 2 years old.
Income Tax Return documents for the last two years.
Bank statement of last twelve months
Applicants cannot afford to be a defaulter on any previous loan.

A machinery loan’s purpose can be either to repair a faulty or broken machine or to get upgraded to a better version.

Advantages of machinery loan

Some advantages of getting machine loans from are as following:

Loans upper limit up to as high as 2 cr
- Loans are offered up to 2cr, to provide working capital whenever needed.
Collateral-free Machinery Loan
- No necessity for any collateral or guarantor to obtain equipment financing in the country of India.
- The facility of Flexi loan
- An innovative and unique feature of this type of loan is that it permits the borrower to manage his cash fund in a much smarter and effective manner

Documents required for a Machinery Loan

If you are looking to opt for a loan to facilitate equipment financing, then there are certain documents that must first be procured and made ready.

1. Proof of Business: For proof of business, one must keep at hand a certificate of practice that states the nature of business. This certificate acts as legal proof of the legitimacy of the business and establishes the reason for the machinery loan subsidy.

2. Past accounts: The financing and the accounts for the last 3 years must be attached with the rest of the documents. The accounts for the past 3 years are required to understand the amount of revenue that is earned by the business or company.

3. Residential proof: Proof of residence of the business and/ or office must be provided. For this, the company PAN card or any legal document that has an affiliation with the company’s residential address may be provided.

4. Identity proof: For identity proof, the KYC or “know your customer” documents must be attached with the rest of the forms and documents to apply for a machinery loan in India.

Benefits of machinery loan

It is also called an equipment financing loan as it aids in buying new machinery/equipment.
It helps in modifying, refurbishing or changing the present machinery/equipment
It helps in repairing faulty equipment or machines or in upgrading.
It assists in buying new machinery for new business
It provides relatively quite flexible options for loan repayment with easy EMIs
It is termed as equipment finance or working capital loan
For startup companies or new businesses, it is an additional benefit

This loan is collateral-free or it does not require any guarantor from selected Small Finance Banks, NBFCs, etc.

Applying for a machinery Loan in India through LendingKart:

Lendingkart offers businesses and new startup owners the simple option of getting a business loan. We at LendingKart offer different types of business loans. From working capital loans to MSME loans and Business loans for women, one can find the perfect loan for their business from across 1300 cities in India.

Applying for a business loan on Lendingkart is a simple four-step process that is easy to understand and follow.

Step 1 – Check for eligibility: To apply for a machinery loan for a new business, one must first check if they are eligible to apply for the desired loan. The criteria for eligibility are all spelled out on the site itself, and one simply must compare it to their current situation.

Step 2 – Submit loan application: the next step is to fill out the application form for the desired loan. The application is a completely online process where you simply must fill out the details regarding your business and yourself too. After filling out the online forms, one simply has to click the submit button to do so.

Step 3 – Await sanctioning: After submitting the application form, all one has to do is now wait for the evaluation of your application. After evaluation, an affair sanction is proposed.

Step 4 – Acquire the funds: After evaluation and when your application gets successfully sanctioned, you will receive your machinery loan for a startup which you can then proceed to use to increase productivity and expand your business.

Fees and charges for Machinery Loan on LendingKart

Machinery Loan	Charges/Tenure
Interest Rate	1% to 2%*
One time Processing Charge	2% of the loan amount
Tenure	1 month to 1 year
Loan Amount	Rs. 50,000 to 2 Crore
Part Prepayment Charges	Rs. 0
Pre-closure Charges	Rs. 0

Machinery Loan FAQs:

1. When is the fund transferred after the loan application in LendingKart.com?

After submission and due sanctioning of the loan application, the funds will be transferred in 3 days.

2. Are there any hidden costs or charges for a loan application on LendingKart?

No, there are no extra hidden costs for application or pre-closure for any type of loan on the LendingKart website. All charges and fees are laid out in a detailed fashion.

3. How long is the repayment period for a machinery loan?

The repayment period on equipment financing loans can be as short as 36 months and can even extend out for 10 years. The repayment period highly depends on the amount of machinery loan and the revenue that is earned by the manufacturing business henceforth.

4. How do I calculate the EMI amount on the machinery loan?

You can easily calculate the interest and EMI and even get a stipulated repayment period for certain amounts by using a machinery loan EMI calculator. You can find multiple calculators online and use them freely to adjust your equipment’s financial proceedings.

5. What is the loan amount on LendingKart.com?

On LendingKart, one can apply for a loan for up to 2 crores in a matter of 3 days.

6. Which are some of the best things about getting a machinery loan without security?

If one needs funding for upgrading their equipment or buying new equipment, then one can opt for a machinery loan from various NBFCs. There are various facilities in India which provide an unsecured loan of a maximum up to Rs 2cr with some other features such as quick approval, minimal paperwork and simple eligibility criteria.

7. Can one really get a collateral free machinery loan?

Yes one can easily get a machinery loan without any collateral security from NBFCs, Micro Finance Companies and Small Finance Banks.

8. Are there any subsidy schemes for the machinery loan?

Yes, there are subsidy schemes for machinery loans.

9. State some of the subsidy schemes.

Some of the subsidy schemes are provided by the Government initiated schemes on the machinery loans which include CLCSS or Credit Linked Capital Subsidy Scheme for technology upgradation and also by Small Industries Development Bank of India.

10. Are any fees applicable for the machinery loan?

Yes, they are applicable for machinery loans.

11. Is GST or ITR required for machinery loan?

While ITR is mandatory but GST is not compulsory if one has they can provide it.

12. What is the loan limit for machinery loans?

The minimum limit for loan is Rs 50,000 while the maximum limit is Rs 2 crore.

13. What is the loan repayment tenure for a machinery loan?

The loan repayment tenure can be as low as 36 months. It can be extended to 10 years.