
Top 7 Ways to Get Machinery Loans for Small & Medium Businesses
Running a small or medium-sized business often presents one significant challenge affording the latest machinery and equipment. Whether you are in manufacturing, textiles, food processing, construction, or retail, machinery is the backbone of smooth operations and business growth. However, buying or upgrading machinery requires heavy investment, and this is where machinery loans come to the rescue.
In this blog, we’ll explore the Top 7 Ways to Get Machinery Loans for your business, what lenders look for and smart tips to ensure quick approval.
Why Machinery Loans Matter for SMEs
For small and medium businesses, machinery isn’t just an asset—it’s a growth engine. Modern equipment helps:
- Increase production speed
- Improve product quality
- Reduce manual effort
- Meet large orders on time
- Stay competitive in the market
Instead of blocking all your working capital, a machinery loan allows you to invest in growth while keeping cash flow free for operations.
Top 7 Ways to Get Machinery Loans
1. Approach Banks for Machinery Finance
Banks are one of the most reliable sources for machinery loans in India. Many public and private sector banks offer specialised business loans to purchase machinery or upgrade equipment.
- Eligibility: Businesses with a minimum turnover, good credit history and clear financial statements.
- Benefits: Competitive interest rates, structured EMIs and longer repayment periods.
Pro Tip: Maintain a healthy CIBIL score (700+), as banks give preference to borrowers with strong creditworthiness.
2. Leverage NBFCs (Non-Banking Financial Companies)
If your business struggles with strict banking requirements, NBFCs are a great option. They offer faster approvals, flexible terms and require less documentation compared to traditional banks.
- Why SMEs Prefer NBFCs: Quick disbursal, flexible loan criteria and higher approval chances.
Tip: Compare NBFC interest rates and processing fees before applying, as they may be slightly higher than those of banks.
3. Government Schemes for Machinery Loans
The Indian government has introduced multiple schemes to help MSMEs upgrade technology and machinery. Some popular options include:
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): Provides collateral-free loans up to ₹2 crore.
- PMEGP (Prime Minister’s Employment Generation Programme): Supports manufacturing units with loans and subsidies.
- Stand-Up India Scheme: Helps SC/ST and women entrepreneurs with machinery and business loans.
Applying under these schemes not only helps you secure finance but also reduces the burden with subsidies or low interest rates.
4. Utilise Machinery Loans from Private Lenders
Apart from banks and NBFCs, several private lenders specialise in offering loans for the purchase of machinery. These lenders often target specific industries like construction, textiles, or manufacturing.
- Advantages: Customised loan products for different machinery types.
- Drawback: Interest rates may be higher than those of traditional lenders.
Pro Tip: Negotiate repayment terms and be aware of any hidden charges before signing agreements.
5. Opt for Loan Against Property (LAP)
If you own property (residential or commercial), you can unlock its value through a Loan Against Property to buy machinery.
- Why it Works: Lower interest rates compared to unsecured loans.
- Benefit: High loan amounts depending on property valuation.
Tip: Use LAP if you need a big-ticket loan and have a stable repayment capacity.
6. Check for Vendor/Dealer Financing
Many machinery manufacturers and dealers collaborate with finance companies or banks to provide loans directly to buyers. This is often called vendor financing.
- How it Works: You buy machinery on credit through the dealer, and the loan is arranged instantly with easy instalments.
- Benefit: Faster approvals, minimal paperwork, and machinery as primary collateral.
- Tip: Always compare vendor financing rates with other options before committing.
7. Go for Unsecured Business Loans
If you need a smaller amount and don’t have collateral to pledge, unsecured business loans are an option. These loans are based purely on your credit profile and business performance.
- Advantages: No need to mortgage assets.
- Limitation: Loan amount may be smaller, with slightly higher interest rates.
Tip: Maintain proper financial records and GST returns to improve chances of approval.

Documents Required for Machinery Loans
While requirements vary by lender, most will ask for:
- KYC documents (PAN, Aadhaar, business registration)
- GST returns (6–12 months)
- Bank statements (last 6–12 months)
- Income tax returns (last 2–3 years)
- Balance sheet & profit-loss statement
- Quotation/proforma invoice for the machinery
Tips to Get Machinery Loans Approved Faster
- Maintain a healthy credit score (700+).
- Keep financial documents updated and error-free.
- Prepare a clear business plan showing the ROI of the machinery.
- Compare multiple lenders before applying.
Avoid applying to too many lenders at once it affects your credit score.
Final Thoughts
Securing the right machinery loan can transform your small or medium-sized business by boosting productivity and competitiveness. From banks and NBFCs to government schemes and vendor financing, there are plenty of ways to access funding. The key is to choose the option that aligns best with your business needs and repayment capacity.
At Sipani Advisors Pvt. Ltd., we help SMEs navigate the loan process with ease, whether it is MSME loans, machinery finance, or project funding. Our team guides you through eligibility, documentation and lender comparison, ensuring you get the best deal without the stress.
Ready to upgrade your business with the right machinery loan? Contact Sipani Advisors today and take the first step toward growth.
GET IN TOUCH