Machinery loan: finance equipment for your business
A machinery loan finances plant, machinery or equipment for a business, usually with the machine as primary security and repayment over its useful life. Since 2025, lenders can also get a 60% NCGTC guarantee on machinery loans to eligible businesses of up to ₹1,00,00,00,000 under the MCGS-MSME scheme. It suits a business buying a specific machine.
Capnix is not a lender and never lends its own capital. The lender sets the margin, tenor, rate and security. We build your case, share your file with lenders on our panel only after you give consent, and stay on it until the loan is disbursed. Getting your loan through us costs you nothing: no joining fee, no file charge, no cut of your loan.
- Loan
- Machinery / Equipment Loan
- Decided by
- The lender
- Cost to you
- ₹0
- Last checked
The facts that matter
| Fact | What it means | Source |
|---|---|---|
| MCGS-MSME | NCGTC gives lenders a 60% guarantee on equipment or machinery loans to micro, small and medium enterprises, up to ₹1,00,00,00,000. Service enterprises are included from 21-Mar-2026. |
PIB release on MCGS-MSME, 21-Mar-2026 Checked 02-Oct-2026 |
| CGTMSE ceiling | Up to ₹10,00,00,000 per borrower at public sector, private and foreign banks, for micro and small enterprises. | CGTMSE scheme document, updated 01-Apr-2026 Checked 02-Oct-2026 |
| Collateral-free bank loans | Banks may not take collateral on loans up to ₹20,00,000 to micro and small enterprises sanctioned or renewed from 01-Apr-2026. |
RBI notification, 09-Feb-2026 Checked 02-Oct-2026 |
| Udyam investment | For Udyam, investment means plant and machinery or equipment, linked to your income tax return. A new firm with no return uses the purchase invoice value excluding GST. | Udyam gazette notifications, 2020 and 2025 Checked 02-Oct-2026 |
| Early repayment | No pre-payment charge on floating-rate business loans to individuals and micro and small enterprises at most banks and larger NBFCs, from 01-Jan-2026. |
RBI pre-payment directions, 02-Jul-2025 Checked 02-Oct-2026 |
How a machinery loan works
The lender funds a share of the machine's quoted price, and you pay the rest as your own margin. The machine is usually the primary security, and you repay in instalments over a tenor matched to its useful life.
These are usual lender practices. The margin, tenor and security are the lender's to set.
Guarantee schemes that make machinery loans easier
Two schemes protect the lender, which can let it lend more readily. The lender applies for cover after it sanctions your loan.
| Scheme | What it does | Source |
|---|---|---|
| MCGS-MSME | NCGTC covers 60% of machinery and equipment loans up to ₹1,00,00,00,000. Service enterprises are included from 21-Mar-2026. |
PIB release on MCGS-MSME, 21-Mar-2026 Checked 02-Oct-2026 |
| MCGS-MSME exporter window | Loans up to ₹20,00,00,000 with 75% cover, with no fee in year one and 0.50% after. |
PIB release on MCGS-MSME, 21-Mar-2026 Checked 02-Oct-2026 |
| CGTMSE | Covers collateral-free loans to micro and small enterprises, up to ₹10,00,00,000 at banks. Fee slabs apply. | CGTMSE scheme document, updated 01-Apr-2026 Checked 02-Oct-2026 |
| How cover reaches you | You apply to a lender registered with CGTMSE. After sanction, the lender applies for cover. | CGTMSE website Checked 02-Oct-2026 |
Machinery loan or term loan?
A machinery loan is a term loan tied to one asset. If the money is for a shed, a fit-out or a wider expansion, a general term loan may fit better. Vehicles are covered on their own page.
What lenders typically publish
Rate cards the lenders publish themselves, read on the date shown.
Published rate cards, as of 02-Oct-2026
| Lender | Rate a year | What else the page says | Source |
|---|---|---|---|
| Bank of Baroda (public sector bank), loans up to ₹25,00,000 | Micro 8.15% to 10.50%, small 10.15% to 10.65%, medium 10.85% | Benchmark rate of 7.90% plus a strategic premium and a spread by loan size. | Bank of Baroda MSME loan rates Checked 02-Oct-2026 |
| HDFC Bank (private bank), business loans | 10.75% to 22.50% | Processing fee up to 2%. | HDFC Bank business loan rates and charges Checked 02-Oct-2026 |
| Bajaj Finance (NBFC), business loans | 14% to 23% | Processing fee up to 4.72% including taxes. | Bajaj Finance business loan rates and charges Checked 02-Oct-2026 |
Each lender publishes these for business loans in general, not for machinery alone. They are not offers, none is a Capnix rate, and your rate is set by the lender.
Fees to expect
| Charge | What to expect | Source |
|---|---|---|
| Processing fee, one bank | HDFC Bank: up to 2%, and nil up to ₹5,00,000 for micro and small enterprises that submit the Udyam certificate before disbursal. | HDFC Bank business loan rates and charges Checked 02-Oct-2026 |
| Penal charges | A penal charge, not extra interest. It cannot be added to the loan to earn more interest. |
RBI penal charges circular, 18-Aug-2023 Checked 02-Oct-2026 |
| Early repayment | None on floating-rate business loans to individuals and micro and small enterprises at most banks and larger NBFCs, from 01-Jan-2026. |
RBI pre-payment directions, 02-Jul-2025 Checked 02-Oct-2026 |
| Key Facts Statement | A standard statement with the annual percentage rate and every charge, before you sign. |
RBI Key Facts Statement circular, 15-Apr-2024 Checked 02-Oct-2026 |
| Charges outside the statement | A fee that is not in the Key Facts Statement cannot be charged unless you have explicitly agreed to it. |
RBI Key Facts Statement circular, 15-Apr-2024 Checked 02-Oct-2026 |
Worked example: a ₹25,00,000 machine over 48 or 60 months
A business finances ₹25,00,000 of machinery at 10.5% a year, the top of the range one public sector bank publishes for micro enterprise loans up to ₹25,00,000. It is an example, not an offer, and your own margin is not included. Your rate is set by the lender.
| Item | 48 months | 60 months |
|---|---|---|
| Loan amount | ₹25,00,000 | ₹25,00,000 |
| Monthly instalment | ₹64,008 | ₹53,735 |
| Total interest | ₹5,72,406 | ₹7,24,085 |
| Total repaid | ₹30,72,406 | ₹32,24,085 |
Instalment = P x r x (1+r)^n / ((1+r)^n minus 1). Processing fees and taxes are not part of it.
Source: Bank of Baroda MSME loan rates, checked 02-Oct-2026.
Who it suits and who it does not
A strong fit if
- You need a specific machine to grow or operate
- You want to keep cash for day-to-day needs
- The machine will earn back its cost over time
Not a fit if
- You need cash for stock or salaries (see a working capital loan)
- The machine has no clear way to earn the instalments
Documents lenders usually ask for
One bank's own guide lists the records below. For a machinery loan, the lender also needs the machine's price and supplier.
- The machine quotation or proforma invoice, and the supplier's details
- Six to twelve months of bank statements
- GST returns for the past 6 to 12 months
- Income tax returns and financial statements for 1 to 3 years
- Udyam certificate and business proof
- KYC papers for the business and its promoters
Source: Bank of Baroda guide to business loan documents, 29-Apr-2026, checked 02-Oct-2026.
Business loan documents checklistHow Capnix fits
- Start with your free Capnix score. It reads turnover, GST discipline and banking health, the signals an equipment lender reads beside the machine.
- We share nothing about your loan requirement with a lender or a Lender Partner before you give consent. Withdraw that consent in your Capnix account at any time.
- The lender pays Capnix a fee after disbursal. It is never added to your loan.
More than a loan. A team that gets you there
The asset helps secure the deal
We help you finance machinery or equipment where the asset itself often serves as security, keeping your cash free for operations.
Matched to asset-friendly lenders
We approach lenders who fund the kind of assets your business runs on, so the structure fits the machine and its useful life.
Where this helps
- Buy new machinery or production equipment
- Fit out a unit with the equipment it needs
- Upgrade ageing assets without draining reserves
- Spread the cost of an asset over its useful life
What happens after you start
We work out your Capnix score first, then work the lender applications with you until the money is disbursed.
See how it worksLoan products, rates, and eligibility are determined by the lenders on our panel. Capnix is not a lender and does not lend its own capital. We run your loan journey end to end.
Have a question?
Find answers here
Whether you are scaling up, smoothing cash flow, or buying new equipment, we take your file to the right lender and stay with it through to disbursal.
Read the asset. Matched to the right lender
Financing should fit the equipment and its useful life, not a generic loan. We read the asset you need and how it earns its keep, then structure the case around it.
From there we approach lenders who fund the kind of assets your business runs on, so the structure fits the equipment, and getting your loan costs you nothing.
Real people,
start to disbursal.
No hand-offs and no generic replies. A dedicated team
works the lenders while you keep running your business.