Loan-to-Value (LTV)
Lenders may finance up to 90% of the purchase price or professional valuation for new equipment. Used equipment is commonly capped around 70% to 80% LTV.
Asset-backed business financing
Equipment and Machinery Loan
Equipment and machinery financing helps businesses acquire productive assets such as medical devices, manufacturing machinery, commercial vehicles, food processing tools, and heavy logistics equipment without paying the full purchase price upfront.
Fixed-asset financing
What is an Equipment and Machinery Loan?
An Equipment and Machinery Loan, often called a fixed-asset loan or equipment financing, is a credit facility secured against the specific business equipment or machinery being purchased. Unlike an unsecured business term loan, the lender treats the asset itself as collateral.
Because the asset supports the facility, businesses may be able to access higher borrowing limits and longer repayment periods compared with unsecured working capital loans, subject to the lender's valuation, credit assessment, and asset suitability.
Assessment factors
Key Features
Interest Rates
Rates may range from 3% to 6.5% p.a., depending on lender, borrower profile, asset type, and structure. For hire purchase, compare the effective interest rate, not just the quoted flat rate.
Tenure
Repayment periods often range from 1 to 5 years, with some lenders offering up to 8 years depending on the useful life and resale value of the asset.
Loan Amount
The approved quantum is directly tied to the cost, valuation, type, age, and marketability of the equipment or machinery.
Green Assets
Some lenders may offer preferential pricing or scheme support for energy-efficient or sustainable assets, subject to their green finance criteria.
Collateral
The financed asset is usually part of the lender's security package, and personal guarantees may still be required for SME borrowers.
Financing structures
Common Equipment Financing Structures
Hire Purchase
You pay an upfront deposit, commonly 10% to 20%, and the financier pays the balance. The facility is repaid through fixed monthly instalments. The lender retains legal ownership until the final payment is made.
Equipment Term Loan
The business borrows against the asset purchase and repays the loan over a fixed schedule. Ownership and security arrangements depend on the lender's structure.
Finance Lease
The business uses the equipment over an agreed period while payments are made. End-of-term options may include purchase, renewal, or return, depending on terms.
EnterpriseSG-backed option
Enterprise Financing Scheme - SME Fixed Assets Loan
The Enterprise Financing Scheme - SME Fixed Assets Loan supports Singapore SMEs financing domestic and overseas fixed assets, including the purchase of equipment and machines for automation and upgrading, whether new or resale.
| Item | Scheme guidance |
|---|---|
| EnterpriseSG risk-share | 50%, with 70% possible for young enterprises or challenged markets. |
| Repayment responsibility | The borrower remains responsible to repay 100% of the loan amount. |
| Interest rate | Subject to participating financial institutions' risk assessment. |
| Final approval | Subject to the participating financial institution's credit approval. |
Ready to finance productive assets?
Consult with MortgageLogic Advisory
We can help review your asset quotation, cashflow, existing facilities, and likely structure before approaching suitable lenders or participating financial institutions.
Contact usNo-obligation assessment
Documents Required
Please prepare the following documents so we can evaluate your eligibility.
- Latest 6 months' corporate bank statements
- Latest 2 years' financial statements or latest management accounts
- Latest ACRA business profile
- Copy of NRIC for directors and guarantors
- Latest 2 years' Notice of Assessment for directors and guarantors
- Sales invoice, purchase order, or quotation of the equipment or machinery
- Asset details such as model, age, serial number, supplier, and valuation where applicable
- Existing facility letters or repayment schedules, if any
