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Tata Capital > Blog > Loan for Business > Types of Businesses Eligible for Machinery Loan in India

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Types of Businesses Eligible for Machinery Loan in India

Types of Businesses Eligible for Machinery Loan in India

Business owners who require heavy machinery or want to upgrade equipment can leverage a suitable machinery loan to raise the necessary capital.

Machinery finance is an incredibly lucrative funding option! Not only does it reduce human resources' needs but also increase business productivity simultaneously. Entrepreneurs can enjoy optimal operational working capital, yet, finance essential equipment purchases and repair faulty machines with a machine loan. 

Who can apply for machinery finance?

Any type of business, irrespective of the industry or size, can avail of machine loan financein India if they meet the necessary eligibility conditions. The standard criteria used by most financial institutes are as follows:

  • Applicants must be aged between 21 years and 65 years. 
  • The business should have been in business for three years.
  • Business turnover should show an upward trend.
  • Applicant must not have defaulted on any previous debt.
  • The company should be in profit for over the last three financial years. 

Do note that different financial institutions rely on different business loan eligibility criteria for providing machinery/equipment financing services.

Is a new business eligible for machinery finance?

New enterprises and startups can also take a machinery loan for new business-specific equipment needs. And improve the productivity favourably for a better turnover rate and enhanced revenue.

Lenders use the same eligibility criteria for providing machinery/equipment finance to startups, without requiring any collateral. However, the business loan interest rates charged on machinery finance vary from a case-to-case basis and depend on factors like:

  • Your business’s stability.
  • The value of the desired equipment.
  • The projected increment in revenue the new equipment will bring.

Additional Read: Factors Affecting Eligibility of Machinery Loan

Essential documentation

Fulfilling the eligibility criteria is only the first step. You must also furnish the necessary paperwork for a successful credit evaluation.

Lenders will assess your repayment capacity using specific KYC and other documents to extend machinery finance.Depending on the lender, you may be asked to present the following paperwork:

  • A duly filled loan application form.
  • Recent passport-sized photograph.
  • Photo identity proof: Voter ID, Passport, Drivers’ license, Aadhaar card, or any other valid proof issued by the Government of India.
  • Business address proof: utility bill, ownership agreement, lease agreement, Sales Tax certificate, ration card, or any other proof issued by the Government of India.
  • Ownership proof: business/residential property documents.
  • Financial records: bank statements, GST challans, ITRs of the last two years, Profit and Loss account for the previous two years, and previous loan details (if any).
  • Original and valid quotation of the desired machinery.

Additional Read: How Does a Machinery Loan Help You Boost Your Business?

Over to you

No matter the loan amount, your finance company's regulations will determine how beneficial the loan will prove in meeting your equipment requirements once it is sanctioned. 

So, if you're looking for a lucrative business loan deal to finance a machinery consignment, Tata Capital's machine loan should be your go-to option. With us, obtain funds at incredibly reasonable repayment terms and competitive ROIs.

To know more, visit our website today!

Apply Now
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