Government Loan Schemes for Machinery Purchase in India

Published: 19 November 2025

If you own any kind of business, having the latest machinery has to be a non-negotiable factor. After all, your competition definitely has it, and they will get ahead of you if you refuse to adapt. But if you’re aware of the market rates, you must be aware of the fact that often machines are anything but affordable.

To add ease, a government loan for machinery purchase is a promising option to expand your business. There are several machinery loan government schemes which allow you to purchase machinery and expand your business. Here at My Mudra, we help you understand each of them so that you can make the right decision.

1. PMEGP Machinery Loan

The PMEGP machinery loan is an MSME machinery loan scheme that is beneficial for new manufacturing and service units that need new machinery. This government loan for machinery purchase offers:

Key Benefits: For starters, you can get a machine subsidy of up to 35% on the cost of any machine. Which means that if a machine costs 1 lakh, you can get a subsidy of 35000 on it, reducing your overall cost.

But that’s not all, you get a loan of ₹50 lakh (manufacturing) / ₹20 lakh (services), making sure your needs are met.

Eligibility: The common requirements are:

Age 18+, minimum class 8 pass.
Only for new units.
No previous central subsidy loan.

Step-by-Step: Apply for PMEGP

The table below explains how you can apply for this loan.

Step	Explanation
Visit the official portal	Go to the PMEGP website and register by entering your personal and business details.
Fill out the application form	Enter accurate information in every field, choose your preferred bank, and provide your project details.
Save your data	Click on “Save Applicant Data” to store your filled information.
Upload documents	Attach all the required documents. Missing documents often cause delays in the PMEGP process.
Submit the application	After submission, you will receive an applicant ID and password on your registered mobile number.
Application review	Authorities will check and verify your details before approving the application.
Track your application	Use the PMEGP e-tracking system to log in with your applicant ID and monitor your application status.

2. Mudra Loan for Machinery Purchase (Shishu, Kishore, Tarun, Tarun Plus)

This is a Mudra loan for machinery purchase, which is the best for Micro businesses, workshops, and service units.

Key Benefits: The major benefits that come with this loan scheme are the fact that you can claim it without collateral, that too up to 20 Lakhs, and it can get processed really quickly. This makes it a perfect government subsidy for machinery if you’re buying small to medium machinery.

Eligibility: You’re eligible for this machinery loan Yojana if you’re:

Individuals & proprietors.
New or existing units.

Step-by-Step: Apply for Mudra Loan

The table below explains the process carefully.

Step	Explanation
Visit the official website	Go to the PM MUDRA official website and select the Udyamimitra portal.
Start the application	Click on the “Apply Now” option under Mudra loan.
Choose applicant type	Select whether you are a New Entrepreneur, Existing Entrepreneur, or Self-employed Professional.
Register	Enter your name, email, and mobile number, then generate and verify the OTP to complete registration.
Fill personal and professional details.	After successful registration, provide your personal and professional information.
Choose a support option.	Select hand-holding agencies if you need help preparing project reports. If not, proceed to the Loan Application Centre.
Select loan category	Choose the required loan type: Shishu, Kishore, or Tarun under the Mudra scheme.
Enter business details	Fill in business information, including business name, activity, and select the industry type (Manufacturing, Service, Trading, or agriculture-related).
Provide additional information	Enter details about ownership, existing banking or credit facilities, proposed credit requirements, future estimates, and preferred lender.
Upload documents	Attach required documents such as ID proof, address proof, photo, signature, and business identity/address proof.
Submit the application	Once submitted, an Application Number is generated. Keep this number for future reference.

3. CGTMSE Machinery Loan (Collateral-Free Loans up to ₹5 Cr)

Do you need machines? You don’t want to pay with collateral? This government loan for machinery purchase might be the one for you.

Key Benefits: So this one has a lot of benefits, the first being that it is a completely unsecured loan, and there is a very low Bank risk because the government provides a 75 to 85% Guarantee. This is a machinery loan for a new business suited for heavy machinery, industrial equipment, and automation.

Eligibility: There are only 2 eligibility criteria:

Must be a registered MSME (Udyam).
Manufacturing, trading, and services are allowed.

Step-by-Step: Apply for CGTMSE

The table below explains the step-by-step process of how to apply for this loan.

Step	Explanation
Register your company	Ensure your business is registered with GST, Udyam, and MSME.
Choose a lending institution	Visit a bank, NBFC, or financial institution that is a registered Member Lending Institution (MLI) under CGTMSE.
Prepare documents	Collect documents such as the loan application form, business registration papers, Udyam Certificate, promoter identity/address proof, PAN (for loans above ₹5 lakh), business plan, and financial statements.
Submit a loan application	Submit your loan application and all required documents to the selected MLI.
MLI applies for the CGTMSE guarantee	Once the MLI approves your loan, they apply to CGTMSE for a credit guarantee through the authorised online system.
Pay guarantee fees	Pay the annual guarantee fee to the lending institution, which is forwarded to CGTMSE to issue the guarantee.
Loan disbursement	After CGTMSE approves the guarantee, the loan is disbursed without collateral or third-party security.

4. Stand-Up India Loan (SC/ST & Women Entrepreneurs)

If you’re a woman who belongs to the SC/ST category, and want to buy machines to start your own business? This government loan for machinery purchase is for you.

Key Benefits: You get a loan of ₹10 lakh - ₹1 crore with up to 85% project funding. Also, the CGFSI cover reduces collateral need.

Eligibility: The eligibility criteria for this loan are:

SC/ST or a Woman entrepreneur.
First-time business.
51% ownership.

Step-by-Step: Apply for Stand-Up India

The table below explains the process carefully.

Step	Explanation
Choose how to apply	You can apply through your nearest bank branch, through the Lead District Manager (LDM), or through the official StandUp Mitra portal.
Visit the online portal (if applying online)	Go to the StandUp India registration page and begin entering your details.
Enter business location details	Provide the complete location information of your proposed business.
Select applicant category	Choose whether you belong to the SC, ST, or Women's category and confirm that you hold at least 51% ownership.
Provide business information	Mention the nature of the proposed business, required loan amount, business description, and premises details.
Add experience details	Enter information about your past business experience, including the duration of experience.
Choose hand-holding support	Select whether you need help with project preparation or any other support.
Fill in personal and enterprise details	Enter the applicant’s personal information, the name of the enterprise, and its form/constitution.
Complete registration	Click the Register button to finish the process.
Further loan process	After registration, the concerned financial institution will contact you to proceed with the Stand-Up India loan application and complete the required formalities.

5. SIDBI Machinery Financing

If you have a business and want to buy new machines to scale, this government loan for machinery purchase is the best. It is suited for automation, high-end industrial machinery, and plant upgrades.

Key Benefits: The benefits of this scheme are that you get it at a lower interest rate, with a higher processing speed. Additionally, this is for Direct machinery financing or refinancing. Making it Ideal for scaling MSMEs.

Eligibility: The criteria for this loan are simple:

Udyam-registered MSME.
Viable financials + machinery justification.

Step-by-Step: Apply for SIDBI

Let’s now take a look at how you will apply to SIDBI

Step	Explanation
Visit the official website	Go to the bank’s official SIDBI loan application webpage.
Choose a loan scheme	Under the ‘Direct Loans’ section, review the available SIDBI schemes.
Start the application	Click on ‘Apply Now’ under your preferred loan product.
Open the registration form	Select the ‘Registration Form’ option to begin the process.
Complete registration	Enter your enterprise name, email ID, and the mobile number registered with Udyam. Create a password to set up your account.
Log in again	Log in using your registered credentials. Select the relevant SIDBI scheme and specify the loan amount required.
Provide basic details	Share information such as the business address, district, and pin code.
Confirmation by SIDBI	SIDBI officials will send a confirmation email. Once you agree, SIDBI will proceed with the evaluation and disbursement steps.

State-Level Machinery Subsidy Schemes

Lastly, there are also some state-level machinery subsidy schemes. You can check online what your state offers, and you can apply for it via the official website.

Conclusion

Planning and starting your business needs machines and money; you can take care of the machines, as the government is taking care of the financial aspects by offering different loan schemes. These machinery loan government schemes have played their role in India’s growth story.

Further, for additional guidance on selecting the right government loan scheme and preparing your application efficiently, My Mudra can help you understand eligibility, documents required, and the best lending options. We also help you connect with NBFCs and banks for choosing plans offered by them that best align with your needs.

Also Read:
- Machinery Loan Without Security: How to Get a Collateral-Free Business Loan
- Top Banks and NBFCs Offering Machinery Loans in India

Frequently Asked Questions

What are the government schemes for machinery purchase? +

Government machinery purchase schemes include PMEGP, Mudra Loan, CGTMSE, Stand-Up India, SIDBI loans, and various state-level subsidy programs.

Can MSMEs get subsidies on machinery loans? +

Yes, MSMEs can get subsidies such as up to 35% under PMEGP and additional benefits through state-level machinery subsidy schemes.

How to apply for a government machinery loan online? +

You can apply online by visiting the official portals of PMEGP, Mudra (Udyamimitra), CGTMSE lenders, StandUp Mitra, or SIDBI and completing the registration and application steps.

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Anjali Singh Assistant Manager

Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.