Machinery / Equipment Finance

Machinery / Equipment Finance

Machinery / Equipment Finance

In India, Lots of financial institutions (including SIDBI) extend funding assistance for acquiring machines or equipment for a business. Such loans are secured by hypothecation of the machinery being financed.

Silent Features:

  • The Machinery / Equipment Finance is depend upon the usage criteria i.e. whether it is standard machine readily re-usable if repossessed or customize machine which is relevant to the business of the borrower only
  • For a standard category machine the funding is available at a margin of 25%-30% whereas for a customized machine it is decided after thorough analysis of its life & usability but margin requirements are higher than the standard machine.
  • The eligibility criteria is somewhat similar to normal funding proposal like cash flow generation capacity after installation of new machine, life of machine & residual value.
  • The funding tenure can be up to 7 years & refinancing options available after the initial period based on the residual value & usage capacity.

FAQ -Machinery & Finance

What is the Eligibility Criteria & Documents Required ?

  • you should be between 25 to 60 years of age
  • business should be at least 2 years old
  • Financial Documents of last 2 years
  • KYC of Promoters
  • Bank Statement

What is the Maximum Amount can be borrowed ?

For Machinery/ Equipment Loan, Based on the quantum of investment generally financial institutions funds up to 75% to 80% of machines value.

What is the Maximum Tenure of Repayment ?

The Maximum Tenure can be up to 7 years.

What is the Interest Rate ?

Rate of Interest varied on type of machines, resale value & quantum of funding sought on total investment, in broader sense it remains within prime lending rates of Banks/ Financial Institutions as announced by RBI.

Can we raise funding for Used Machines/ Equipment’s ?

yes, used machines are also eligible provided they have sufficient resale value after finance.

Do i need to give collateral ?

No, Such loans are secured by hypothecation of the machinery being financed.