Businesses that fall under the Micro, Small, and Medium Enterprises (MSME) category are typically eligible for machinery loans. These loans are designed to help small businesses invest in new equipment or upgrade existing machinery. Whether you’re in manufacturing, healthcare, or textiles, as long as your business fits the MSME profile and demonstrates a clear need for process upgrades with the right machinery, you can qualify for this type of loan.
Here’s a typical MSME profile for eligibility:
Annual turnover: Micro-enterprises have a turnover of less than ₹5 crore, small enterprises up to ₹50 crore, and medium enterprises up to ₹250 crore.
Employee count: Micro-enterprises often have fewer than ten employees, small businesses may have 10-50 employees, and medium enterprises can employ 50-200 workers.
Years in operation: Typically, businesses with a stable operational history of at least 2-3 years stand a better chance of securing loans.
Business sector: Manufacturing, processing, trading, or services in industries such as textiles, healthcare, and food processing are commonly eligible.
Machinery necessity: Demonstrating a clear requirement for machinery or equipment that will contribute to business expansion or operational improvement.
Credit history: A good credit score (above 700) and financial health are key factors as banks assess risk before offering loans to MSMEs.
Collateral: Depending on the lender, MSMEs may need to provide collateral, although some loans may be collateral-free under government-backed schemes.