Check your eligibility
What These Loans Fund
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Plant and machinery purchase and i...
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Factory building and civil works
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Raw material and consumables
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Work in progress and finished good...
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Receivables funding
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Capacity expansion and modernisati...
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?
- Working capital drawn for capital expenditure
- Promoter drawings
- Second-hand machinery beyond the lender's criteria
- Units without required environmental and factory clearances
- Amounts above sanctioned limits
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
Manufacturing businesses need two quite different kinds of funding, and confusing them is the most common structural mistake in the sector. Plant and machinery require long-term term loans matched to the asset's life. Raw materials, work in progress and receivables require revolving working capital.
The manufacturing cycle is also longer than a trading cycle. Raw material becomes work in progress, becomes finished goods, becomes a receivable, becomes cash — and each stage consumes funding. A manufacturer growing quickly can be profitable and cash-starved at the same time.
Manufacturers registered as MSMEs have access to the guarantee and subvention schemes, and to technology upgradation schemes that specifically fund modernisation. Those are frequently cheaper than commercial lending and are underused.
Who should consider it
Manufacturers of any scale funding plant, capacity or working capital. Businesses modernising equipment. Manufacturers whose growth is outpacing their cash generation.
Benefits
- Term loans matched to plant and machinery life
- Working capital facilities sized to the manufacturing cycle
- MSME schemes reduce the effective rate for eligible units
- Technology upgradation schemes fund modernisation specifically
- Longer tenures than most business lending, to ten years
- Interest and depreciation both deductible
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
- Plant and machinery purchase and installation
- Factory building and civil works
- Raw material and consumables
- Work in progress and finished goods funding
- Receivables funding
- Capacity expansion and modernisation
Usually not funded
- Working capital drawn for capital expenditure
- Promoter drawings
- Second-hand machinery beyond the lender's criteria
- Units without required environmental and factory clearances
- Amounts above sanctioned limits
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.
- Keep the two structures separate. Funding machinery from a working capital facility leaves it permanently drawn and the business permanently short.
- Size working capital on the full manufacturing cycle, not just on receivables. Raw material and work in progress consume funding for weeks before anything is invoiced.
- Check the technology upgradation schemes before financing modernisation commercially. They are specifically designed for it and are frequently cheaper.
- Growth consumes cash in manufacturing. A business scaling quickly needs its working capital limit reviewed more often than annually.
- Keep factory and environmental clearances current. Lenders assess them, and a lapse can hold up disbursal on an otherwise approved facility.
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
Should machinery and working capital be one facility?
No, and this is the most common structural mistake in the sector. Machinery needs a term loan matched to the asset's life; working capital needs a revolving facility that turns with the cycle. Funding a machine from a working capital limit leaves that limit permanently drawn.
How do I size the working capital requirement?
On the full cycle, not just receivables. Raw material sits, work in progress sits, finished goods sit, and only then does a receivable arise. Each stage consumes funding, which is why manufacturers need more working capital than traders with similar turnover.
Are there special schemes for modernisation?
Yes. Technology upgradation schemes exist specifically to fund plant modernisation for eligible units, frequently at rates below commercial lending. They are underused, and worth checking before arranging finance commercially.
Why am I profitable but short of cash?
Because growth consumes working capital in manufacturing. Higher sales mean more raw material, more work in progress and more receivables, all funded before the cash arrives. It is a structural feature of scaling, not a sign of a problem, but it needs funding deliberately.
Does the loan cover the factory building?
Term loans generally fund civil works alongside plant. Environmental and factory clearances are assessed as part of the process, so keeping those current avoids a disbursal delay on an otherwise approved facility.
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.