Check your eligibility
What These Loans Fund
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Machinery and equipment purchase p...
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Installation
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Import duties and freight on impor...
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Ancillary equipment required to op...
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Second-hand equipment within the l...
Who Can Consider This Loan?
- Business vintage, commonly two to three years of operations
- Minimum annual turnover set by lender and segment
- Profitable operations, or a demonstrable path to profitability
- Clean banking conduct with no cheque returns
- Promoter credit scores, which lenders assess alongside the business
- GST registration and filing compliance, where applicable
What May Not Be Funded?
- Margin money — your contribution to the purchase
- Consumables, tooling and spares
- Equipment beyond the lender's permitted age for used machinery
- Annual maintenance contracts
- Processing and documentation charges
Always check the sanction letter before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading loans companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced loans professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
Equipment finance funds the purchase of machinery, secured against the equipment itself. Because it is secured on a specific, identifiable asset, it is priced below unsecured business lending and funded over a longer tenure.
The tenure should match the asset's productive life. Funding a machine with a ten-year life over three years creates an unnecessary cash squeeze; funding a machine with a four-year life over seven means paying for equipment that no longer earns.
Whether to buy or lease is a real question rather than a formality. Buying builds an asset and gives you depreciation; leasing preserves cash, keeps the equipment off your balance sheet and makes upgrading easier. For rapidly obsolescing technology, leasing is frequently the better answer.
Who should consider it
Manufacturers buying plant. Businesses acquiring specialised equipment. Medical practices funding diagnostic machinery. Construction firms buying earthmoving equipment. Printing, packaging and processing businesses.
Benefits
- Secured on the equipment, so priced below unsecured lending
- Funding of 75 to 90 per cent of the equipment cost
- Tenure matched to the asset's productive life
- Both interest and depreciation are deductible
- Imported equipment funded including duties and freight, at many lenders
- MSME schemes may reduce the effective rate further
What the loan funds, and what it does not
Read the right-hand column first. It is the one that decides how much you have to arrange yourself.
Usually funded
- Machinery and equipment purchase price
- Installation, commissioning and calibration
- Import duties and freight on imported equipment
- Ancillary equipment required to operate the machine
- Second-hand equipment within the lender's age criteria
Usually not funded
- Margin money — your contribution to the purchase
- Consumables, tooling and spares
- Equipment beyond the lender's permitted age for used machinery
- Annual maintenance contracts
- Processing and documentation charges
Funding limits and the treatment of add-ons vary between lenders and move with the borrower profile. The sanction letter you receive is what governs — we will walk you through it before you sign.
How it works with us
- 1 We read your financials before approaching anyone Turnover, margins, banking conduct and existing obligations. Lenders read the same numbers, and it is better to know what they will see.
- 2 Matched to lenders who write your segment Manufacturing, trading and services are underwritten differently. Applying to the wrong lender wastes weeks and marks your credit file.
- 3 Structure chosen before rate A term loan, a working capital line or an overdraft solve different problems. The cheapest wrong structure is still the wrong structure.
- 4 Documentation prepared properly, once Financials, GST returns, bank statements and projections in the format lenders expect. Incomplete files are the main cause of delay.
- 5 Sanction, disbursal and an eye on the covenants We flag the conditions attached to the sanction so a covenant breach is not the first you hear of a problem.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Match the tenure to the asset's productive life. Too short creates a cash squeeze; too long means paying for equipment that has stopped earning.
- Compare buying against leasing honestly. For technology that obsolesces quickly, leasing preserves cash and makes upgrading straightforward.
- Include installation and commissioning in the funding request. Those costs are substantial on industrial plant and are frequently omitted from the application.
- For imported equipment, confirm whether duties and freight are fundable. Most lenders will fund them; leaving them out understates your requirement significantly.
- Check MSME scheme eligibility before financing commercially. Technology upgradation and subvention schemes can reduce the effective rate materially.
Documents required
- Business registration — incorporation, partnership deed or proprietorship proof
- PAN of the business and of the promoters
- Last two to three years of audited financial statements
- Last two to three years of income tax returns with computation
- GST returns for the last twelve months
- Bank statements for the last twelve months
- KYC of promoters, partners or directors
- Existing loan sanction letters and repayment records
Frequently Asked Questions
How much of the equipment cost is funded?
Typically seventy-five to ninety per cent, with the balance as your margin contribution. Many lenders will also fund installation, commissioning and, for imported machines, duties and freight — which are substantial and frequently left out of the request.
What tenure should I take?
One matched to the equipment's productive life. A machine that will earn for ten years financed over three creates an unnecessary squeeze; one that will be obsolete in four financed over seven leaves you paying for something that no longer earns.
Should I buy or lease?
It depends on obsolescence. Buying builds an asset and gives you depreciation. Leasing preserves cash, keeps the equipment off the balance sheet and makes upgrading straightforward. For technology that dates quickly, leasing is frequently the better answer.
Can I finance second-hand machinery?
Within the lender's age criteria, yes, though funding percentages are lower and tenures shorter. Valuation matters much more here, and an independent inspection before committing is worth the cost.
Are there cheaper schemes available?
For MSMEs, yes. Technology upgradation schemes and credit-linked subsidy schemes are designed specifically for plant modernisation and can reduce the effective rate substantially. Check eligibility before arranging commercial finance.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.