Bank of Baroda Machinery Loan - Upgrade Your Equipment

Enter Pincode

Personal Details

Features of Bank of Baroda Machinery Loan

Purpose:
- Financing the purchase of new or pre-owned machinery/equipment for various business purposes, including manufacturing, construction, mining, and agriculture.
- Covers machinery like tractors, power tillers, plant and machinery, testing equipment, lab equipment, and other industrial tools.
Loan Types:
- MSME Loans: Includes schemes like Baroda MSME Loan, MSE Capex Loan, and SME Medium Term Loan, which support the acquisition of plant and machinery for business expansion.
- Construction & Mining Equipment Finance: Term loans for purchasing new construction/mining equipment, suitable for first-time buyers, small, medium, large, and strategic segment contractors, and mining operators.
- Agricultural Machinery Finance: Flexible financing for heavy agricultural machinery like tractors and power tillers to improve farm productivity.
Loan Amount:
- MSME Loans: Varies based on the scheme and business needs, with no specific upper limit disclosed but can cover significant capital expenditure.

Benefits of BOB Machinery Loans

Enhanced Productivity: Enables the purchase of modern machinery, improving operational efficiency and output for businesses, construction firms, and farmers.
Affordable Financing: Competitive interest rates linked to BRLLR (8.90% as of February 10, 2025) or MCLR, making loans cost-effective. Flexible repayment options, including EMIs and moratorium periods (up to 1 year for MSME loans), align with cash flow.
High Loan Amounts: Covers significant capital expenditure, with loans up to ₹50 crores for construction/mining equipment and tailored amounts for MSME and agricultural machinery.

- Collateral-Free Options: Certain MSME loans may not require collateral, reducing financial burden for small businesses and startups.
- Quick and Hassle-Free Process: Streamlined documentation and faster loan sanction/disbursal ensure timely access to funds. Online application through www.bankofbaroda.in simplifies the process.
- Subsidies and Support: Access to government subsidies (where applicable) through Bank of Baroda as a nodal agency, lowering the overall cost for eligible applicants.
- Flexible Tenure: Loan repayment periods up to 7 years for MSME and equipment loans, allowing manageable repayment schedules.
- Business Expansion: Supports MSMEs and contractors in scaling operations by financing new or pre-owned machinery, fostering growth and competitiveness.
- Agricultural Empowerment: Farmers can acquire heavy machinery (e.g., tractors, power tillers) to modernize farming, increasing yield and income.
- Transparent Terms: No hidden charges and clear fee structures (e.g., processing fees of 0.25%–2%) ensure trust and predictability.

How to Apply for Bank of Baroda Machinery Loans

1. Determine Eligibility:
- MSME Loans: For micro, small, or medium enterprises (investment in plant & machinery ≤ ₹50 crore, turnover ≤ ₹250 crore).
- Construction & Mining Equipment Loan: For individuals, proprietorships, partnerships, or companies in construction/mining.
- Agricultural Machinery Loan: For farmers with a minimum of 4 acres of irrigated land or as per state land ceiling laws.
- Ensure satisfactory credit history and existing banking relationship (1–3 years preferred for some schemes).
2. Gather Required Documents:
- KYC Documents: PAN Card, Aadhaar, Passport, Voter’s ID, Driving License, or utility bills.
- Business Documents: Business registration proof, GST returns, ITR for 2–3 years, bank statements (last 6–12 months).
- Project Details: Quotation/invoice for machinery, project report (if applicable), and land-holding documents for agricultural loans.
3. Choose Application Method:
- Online Application:
  - Visit www.bankofbaroda.in.
  - Navigate to the “Loans” section and select the relevant loan category (e.g., MSME Loans, Equipment Finance, or Agri Loans).
  - Fill out the online application form with personal, business, and loan details.
  - Upload scanned copies of required documents.
  - Submit the application for processing.
- Offline Application:
  - Visit the nearest Bank of Baroda branch.
  - Request the machinery loan application form from the loan officer.
  - Submit the completed form along with physical copies of required documents.
  - For agricultural loans, contact the bank’s rural or agri-banking division for specialized assistance.
4. Loan Processing:
- The bank will verify your documents and assess your eligibility, creditworthiness, and machinery requirements.
- A site visit or business evaluation may be conducted for larger loans.
- Loan approval and disbursal typically occur within a few working days, depending on the scheme and documentation completeness.
5. Follow Up:
- Track your application status online (if applied digitally) or contact the branch for updates.

Eligibility Criteria for Bank of Baroda Machinery Loans

1. MSME Loans (for Plant and Machinery):
- Applicant Type: Micro, Small, and Medium Enterprises as per the Gazette notification S.O. 2119(E) dated June 26, 2020:
- Includes proprietorships, partnerships, private/public limited companies, or other legal entities engaged in manufacturing, services, or trading.
- Business Vintage: Preferably operational for 1–3 years with a satisfactory track record.
- Credit History: Good credit score and no defaults with financial institutions.
- Banking Relationship: Existing customers with satisfactory account conduct (e.g., 1–3 years of banking with Bank of Baroda) may receive preferential terms.
2. Construction & Mining Equipment Finance Loan:
- Applicant Type: Individuals, proprietorship firms, partnership firms, private/public limited companies, or trusts engaged in construction or mining activities.
- Suitable for: First-time buyers, small, medium, large, and strategic segment contractors, and mining operators.
- Purpose: Purchase of new or pre-owned construction/mining equipment (e.g., excavators, loaders).
- Financial Stability: Demonstrated ability to repay the loan, supported by income proof, business financials, or project contracts.
- Creditworthiness: Satisfactory credit history and no adverse CIBIL or other credit bureau reports.
3. Agricultural Machinery Finance:
- Applicant Type: Individual farmers, farmer producer organizations (FPOs), or agricultural entrepreneurs.
- Land Holding: Minimum 4 acres of irrigated land or as per state land ceiling laws. Proof of land ownership or tenancy may be required.
- Purpose: Purchase of heavy agricultural machinery (e.g., tractors, power tillers, harvesters).
- Repayment Capacity: Adequate income from farming or allied activities to service the loan.
- Credit History: No major defaults; farmers with limited credit history may still qualify based on land and income assessment.

Documents Required for Bank of Baroda Machinery Loans

KYC Documents (for Individuals/Proprietors):
- Identity Proof: PAN Card, Aadhaar Card, Passport, Voter’s ID, or Driving License.
- Address Proof: Aadhaar Card, Passport, Voter’s ID, utility bills (electricity/water), or rent agreement.
- Passport-size photographs (2–4 recent photos).
- Signature Verification: From a bank or on official documents.
Business Documents (for MSMEs, Firms, or Companies):
- Business Registration Proof: Certificate of Incorporation, Partnership Deed, Shop & Establishment License, or MSME/Udyam Registration Certificate.
- GST Registration Certificate and GST returns (last 6–12 months, if applicable).
- Income Tax Returns (ITR) for the last 2–3 years with computation of income.
- Financial Statements: Balance Sheet, Profit & Loss Account, and Cash Flow Statement (for the last 2–3 years, audited if applicable).
- Bank Statements: Last 6–12 months of the business’s primary bank account.
- Memorandum and Articles of Association (for companies) or Partnership Deed (for firms).
- Business Profile: Brief write-up about the business, nature of operations, client base, and growth potential.
Agricultural Documents (for Farmers):
- Land Ownership/Tenancy Proof: Land records (e.g., 7/12 extract, 8A, or Patta), sale deed, or lease agreement.
- Proof of Land Holding: Minimum 4 acres of irrigated land or as per state land ceiling laws.
- Crop Cultivation Proof: Details of crops grown or income from farming activities.
- Income Proof: Agricultural income certificates or bank statements reflecting farm income.
- Farmer ID (if available): Issued by local government or revenue department.
Loan-Specific Documents:
- Machinery Quotation/Invoice: Proforma invoice or quotation from the machinery supplier/dealer, specifying cost and details of the equipment.
- Project Report: Brief report outlining the purpose of the machinery, expected benefits, and repayment plan (required for larger MSME or equipment loans).
- Loan Application Form: Duly filled and signed, available online at www.bankofbaroda.in or at a branch.
- Purpose Statement: For agricultural loans, a statement on how the machinery (e.g., tractor, power tiller) will enhance productivity.
- Repayment Plan: Proposed EMI plan, business income sources, and revenue projections (for MSME borrowers).
Additional Documents (if applicable):
- Existing Loan Details: Statement of existing loans or liabilities, if any, with repayment track record.
- Collateral Documents: Property papers or asset details if collateral is required (e.g., for larger loans or hypothecation of machinery).
- Business Continuity Proof: Contracts, purchase orders, or client agreements for construction/mining equipment loans.
- Subsidy Documents: For agricultural or MSME loans eligible for government subsidies, additional forms or certificates as specified by the scheme.
- No Dues Certificate: From existing lenders, if applicable, to ensure there are no outstanding liabilities.
- Environmental or Safety Compliance Certificates: Especially for construction or industrial machinery.

Factors Affecting Bank of Baroda Machinery Loans (Focus on Machinery)

Type of Machinery:
- The loan must be for specific machinery aligned with the loan scheme:
   • MSME Loans: Plant and machinery for manufacturing, processing, or service industries (e.g., CNC machines, industrial equipment, testing/lab equipment).
   • Construction & Mining Equipment Finance: Heavy equipment like excavators, loaders, bulldozers, or mining machinery.
   • Agricultural Machinery Finance: Tractors, power tillers, harvesters, or irrigation equipment.
- The machinery must be relevant to the applicant’s business or farming activities to justify the loan purpose.
New vs. Pre-Owned Machinery:
- Loans can finance both new and pre-owned machinery, but:
• New machinery is preferred for higher loan amounts and better terms.
• Pre-owned machinery requires additional scrutiny, such as a valuation report, proof of condition, and remaining useful life, to ensure it’s a viable asset.
Cost and Loan Amount:
- The machinery’s cost (as per the supplier’s quotation/invoice) determines the loan amount.
   • MSME Loans: Covers plant and machinery costs, with margins of 20%–25% (borrower contributes this portion).
   • Construction & Mining Equipment: Up to ₹50 crores, based on equipment cost.
   • Agricultural Machinery: Loan amount tailored to equipment cost, subject to land-holding and repayment capacity.
- The bank ensures the loan amount aligns with the machinery’s market value and the applicant’s financial capacity.
Supplier Credibility:
- The machinery must be sourced from a reputed supplier or manufacturer.
- A proforma invoice or quotation from the supplier is mandatory, detailing the machinery’s specifications, cost, and delivery terms.
- For pre-owned machinery, the bank may verify the seller’s credibility or require a third-party valuation.
Useful Life and Depreciation:
- The machinery’s expected useful life impacts loan tenure and approval:
• New machinery with a longer lifespan supports longer repayment periods (up to 7 years for MSME/equipment loans).
• Pre-owned machinery with a shorter remaining life may result in shorter tenures or stricter terms.
- The bank assesses depreciation to ensure the machinery retains value as collateral (if hypothecated).
Hypothecation as Collateral:
- The machinery being financed is typically hypothecated to the bank as security for the loan.
- The bank evaluates the machinery’s resale value and marketability in case of loan default.
- For high-value equipment (e.g., construction machinery), additional collateral may be required if the machinery’s value is insufficient.
Purpose and Productivity Impact:
- The machinery must enhance the applicant’s business productivity or farm output:
• For MSMEs: Increased production capacity, cost efficiency, or service quality.
• For construction/mining: Ability to undertake larger projects or improve operational efficiency.

Frequently Asked Questions (FAQs)

1. What is a machinery loan from Bank of Baroda?

A machinery loan is a financing option provided by Bank of Baroda to help businesses, contractors, and farmers purchase new or pre-owned machinery/equipment. It supports:
MSMEs: Plant and machinery for manufacturing or services.
Construction/Mining: Heavy equipment like excavators or loaders.
Agriculture: Tractors, power tillers, or harvesters.

2. Who is eligible for a machinery loan?

MSME Loans: Micro, small, or medium enterprises (investment ≤ ₹50 crore, turnover ≤ ₹250 crore) including proprietorships, partnerships, or companies.
Construction & Mining Equipment Finance: Individuals, firms, or companies engaged in construction/mining activities.
Agricultural Machinery Finance: Farmers with a minimum of 4 acres of irrigated land or as per state land ceiling laws.
General requirements include a good credit history, financial stability, and relevant business/farming activity.

3. What types of machinery can be financed?

MSME: Industrial machinery, CNC machines, testing/lab equipment, or other plant and machinery.
Construction/Mining: Excavators, bulldozers, loaders, or mining equipment.
Agriculture: Tractors, power tillers, harvesters, or irrigation equipment.
Both new and pre-owned machinery are eligible, subject to valuation for used equipment.

4. What is the maximum loan amount?

MSME Loans: Varies based on business needs and machinery cost (no specific upper limit disclosed).
Construction & Mining Equipment: Up to ₹50 crores.
Agricultural Machinery: Tailored to equipment cost, subject to land-holding and repayment capacity.

5. What are the interest rates for machinery loans?

Rates are linked to the Baroda Repo Linked Lending Rate (BRLLR) (8.90% as of February 10, 2025) or Marginal Cost of Funds Based Lending Rate (MCLR).
Actual rates depend on the applicant’s credit profile, loan scheme, and risk assessment.
Contact the bank for precise rates.

6. What is the repayment tenure?

MSME Loans: Up to 7 years, including a moratorium period of up to 1 year.
Construction & Mining Equipment: Typically up to 7 years (varies by loan terms).
Agricultural Machinery: Flexible tenure based on repayment capacity and equipment cost. Repayment can be in equated monthly installments (EMIs) tailored to cash flow.

7. What documents are required to apply?

KYC: PAN Card, Aadhaar, Passport, Voter’s ID, or utility bills.
Business Documents: Business registration, GST returns, ITR (2–3 years), bank statements (6–12 months).
Agricultural Documents: Land records, proof of 4 acres irrigated land, or crop income proof.
Machinery Details: Quotation/invoice from the supplier, project report (if applicable).
Collateral Documents: If required (e.g., property papers or hypothecation of machinery).

8. How can I apply for a machinery loan?

Online:
Visit www.bankofbaroda.in, select the relevant loan (MSME, Equipment Finance, or Agri Loan).
Fill out the application form and upload documents. Submit for processing.

Offline:
Visit a Bank of Baroda branch, collect the application form, and submit with documents.
For agricultural loans, contact the rural/agri-banking division.

9. Is collateral required for machinery loans?

MSME Loans: May be collateral-free for smaller amounts, depending on the scheme.
Construction & Mining Equipment: Hypothecation of the machinery is common; additional collateral may be needed for larger loans.
Agricultural Machinery: Usually hypothecation of the equipment; land or other assets may be required for higher amounts.

10. What are the processing fees?

Typically 0.25%–2% of the loan amount, subject to minimum/maximum caps (e.g., ₹1,000–₹20,000 + GST).
Exact fees vary by scheme; no hidden charges are applied.

11. Can I avail of subsidies with a machinery loan?

Yes, for certain agricultural machinery (e.g., under schemes like SMAM) or MSME equipment, subsidies may be available.
Bank of Baroda acts as a nodal agency to verify eligibility and release subsidies. Confirm with the bank for specific schemes.

12. How long does loan approval take?

Approval and disbursal typically occur within a few working days, depending on document verification and loan size.
Online applications may expedite the process, but physical verification (e.g., of machinery or business) may be required.

List of Bank Of Baroda Machinery Loans

MSME Loans (for Plant and Machinery)
Construction & Mining Equipment Finance Loan

Agricultural Machinery Finance
Overdraft (OD) Facility for Machinery-Related Working Capital

Composite Loans for Machinery and Working Capital
Specialized Machinery Loans

Government-Sponsored Machinery Loan Schemes

Create Account

Sign In

Welcome Back!

Hello, Friend!

Reset Password

Reset Your Password

Change Password

Update Your Password

Logintoloans Assistant