Equipment Finance Scheme
The Equipment Finance Scheme is implemented by the Tamil Nadu Industrial Investment Corporation Ltd (TIIC), a state-owned financial institution under the Government of Tamil Nadu’s Department of Industries. The scheme was introduced to support micro, small, and medium enterprises (MSMEs) in financing the purchase, installation, or modernization of plant and machinery including imported or second-hand equipment. The objective of the scheme is to ease access to medium-term credit for capital equipment, improve manufacturing competitiveness, and help enterprises upgrade technology. Your business can benefit by receiving affordable term loans for purchasing machinery or equipment required for new units, expansion, or diversification.
Key Features
- Term loan for machinery purchase and installation: The scheme provides financial assistance to purchase, install, or modernize machinery, including equipment required for plant operations, quality testing, or automation. This can include imported or indigenous machinery.
- Finance for second-hand machinery: Unlike many conventional loans, TIIC’s scheme allows funding for second-hand machinery, enabling MSMEs to save cost while upgrading technology. The loan amount can go up to ₹ 2 crore for this category.
- Loan quantum and categories based on CIBIL rating:
- Category A: CIBIL score above 650 — loans from ₹ 10 lakh to ₹ 2 crore.
- Category B: CIBIL score above 600 — loans from ₹ 10 lakh upwards (need-based).
- Long repayment tenure: Loans can be repaid over 7 years, including a 6–12 month moratorium period to help enterprises stabilize operations before starting repayments.
- Collateral and promoter contribution: Collateral and promoter’s equity are moderate:
- Category A: 25 % margin (cash deposit or property).
- Category B: 25 % property security.
- For second-hand machinery: 25–40 % promoter contribution, collateral 100 %.
- Eligibility for established or new units: Existing MSMEs with at least 3 years of operations and a profitable track record can apply directly. New or greenfield units may apply with Head Office approval.
Financial Assistance
Eligibility Criteria
Who can apply:
- Manufacturing enterprises (MSMEs) in Tamil Nadu registered under the relevant MSME/Industrial policy norms and meeting operational/financial criteria (for TIIC Equipment Finance scheme: must be in operation for 3 completed years, have net profit in last 3 years for used machinery eligibility)
- Units seeking equipment purchase (new or second-hand machinery) including imported machines, within the state.
- Enterprises meeting promoter creditworthiness criteria (e.g., CIBIL score >650 for Category A in TIIC scheme)
Who cannot apply:
- Enterprises not registered/operating in Tamil Nadu (i.e., outside state) or not recognised as manufacturing MSME under state policy.
- Units that have not met the minimum operational/financial criteria (e.g., for second hand machinery in TIIC scheme: must have been in operation for 3 years and profit record).
- Projects not related to plant & machinery acquisition (e.g., purely trading activity without asset creation) - may be excluded.
- Units that fail to provide required collateral or promoter creditworthiness or whose project does not meet debt-equity norms as prescribed.
Documents Required
- MSME registration certificate (UDYAM or state MSME registration) of the enterprise.
- Project report specifying machinery cost, vendor details/import details (if applicable), erection/civil work cost.
- Financial statements for last 3 years (balance sheet, profit/loss).
- Promoter CIBIL/credit history (for TIIC scheme: CIBIL>650 or >600 as per category)
- Invoice for machinery purchase, delivery/installation proof once sanctioned.
- Collateral security details (immovable property, fixed deposit) as required by financing institution.
- Any import documents if machinery is imported (Bill of Entry, LC, etc) for imported machinery eligibility.
Application Process for the Scheme
Option 1: Apply with Bullit (Recommended)
Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Lean teams. Designed to save you time and effort. Access expert help from start to finish.
Option 2: Through TIIC / State Financial Institution
- Prepare a project report: specify cost of machinery (new or second-hand), source (domestic/import), erection cost, civil works if any.
- Approach TIIC (Tamil Nadu Industrial Investment Corporation Ltd) or designated financing institution with application form and required documents. See TIIC’s Equipment Finance Scheme page.
- Submit promoter details (credit score), unit’s financials (last 3 years profit/loss), balance sheet, manufacturing licence/registration.
- TIIC evaluates the project under Category A or B, assesses collateral, debt-equity ratio. On sanction, term loan is disbursed.
- Unit installs machinery, submits evidence of procurement and installation, and monitors repayment as per loan schedule.
Option 3: Bank Term Loan Route (with state MSME policy support)
- While not purely the “machinery finance scheme”, units may approach banks for term loan for plant & machinery, and also avail state’s Capital Subsidy (25%) under the state MSME policy.
- Process: Unit submits application to bank, bank sanctions term loan, and unit applies to state subsidy portal for reimbursing subsidy component.
- Benefit: Combined effect of finance + subsidy improves project metrics.
Power Combos with The Scheme