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Features of UCO Bank Machinery Loan

  • Purpose:
    - The machinery loan is designed to finance the acquisition of new machinery, equipment, or capital goods for MSME businesses.
    - Purchase of plant and machinery for manufacturing, service, or trading sectors.
    - Expansion of existing business units by upgrading or adding new equipment.
    - Meeting capital expenditure requirements, such as setting up new production lines or modernizing facilities.
    - The loan can be availed as a term loan or as part of a composite loan (combining working capital and capital expenditure).
  • Eligibility:
    - Business Entities: Proprietorships, partnerships, private limited companies, public limited companies, and trusts engaged in MSME activities (manufacturing, trading, or services) are eligible.
  • Specific Schemes:
    - UCO Udyog Bandhu Loan: Open to all MSME businesses needing financial assistance for machinery or equipment purchase.
    - UCO Roop Sangam Loan: Exclusively for women entrepreneurs or MSME businesses where management is controlled by women or a majority of partners are women.
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      • Loan Amount:
        - UCO Udyog Bandhu Loan: Up to ₹7.5 crore for term loans and working capital needs.
        - UCO Roop Sangam Loan: Up to ₹10 lakh for term loans and ₹3 lakh for working capital.
        - UCO Doctors Loan: Up to ₹3 crore for equipment, vehicles, or capital expenditure.
        - PMEGP: Up to ₹1 crore for manufacturing and ₹25 lakh for trading/services (for second loans).
        - Disbursed directly to suppliers via demand draft/pay order for proper utilization.
      • Interest Rates:
        - Linked to UCO Float Rate (e.g., 9.30%) + Strategic Spread/Credit Risk Premium.
        - Example: UCO Udyog Bandhu (~9.85%), UCO Doctors Loan (~8.45%), Roop Sangam (~7.45%).
        - Strategic business discounts (up to 0.75%) may be available. Rates are floating and subject to change based on RBI/MCLR guidelines.
      • Repayment Tenure: Up to 5 years for term loans, excluding moratorium (6 months to 1 year). Schedule depends on business surplus, break-even, and machinery life. For composite loans, repayment applies only to term loan portion.
      • Security and Collateral:
        - Primary: Hypothecation of the machinery.
        - Collateral: Not required for loans up to ₹10 lakh (under CGTMSE/CGFMU).
        - Above ₹2 crore: Equitable mortgage of land/building or acceptable alternatives.
        - Roop Sangam: No collateral up to ₹50,000.
      • Margin:
        - Roop Sangam: 15% for loans above ₹50,000.
        - PMEGP: 20% for stock/debts, 25% for fixed assets.
      • Processing Fees and Charges:
        - Roop Sangam: No charges for loans up to ₹50,000; standard charges beyond.
        - MSME Loans: Around 0.50% of the loan (minimum ₹2,000).
        - No prepayment penalty if repaid using own funds; 1% if from other sources.
      • Documentation Requirements:
        - Identity: Aadhaar, PAN, Passport, Voter ID, or DL.
        - Address: Aadhaar, passport, utility bill, or bank statement.
        - Business Proof: Licenses, GST, registration.
        - Financials: 6-month bank statement, 2-year ITR/balance sheets, projections.
        - Machinery Details: Quotation, supplier info, specs.
        - Companies: MOA, AOA, Partnership Deed, Board Resolution.
      • Disbursement Process: Direct to supplier via DD or pay order. Branches verify end-use monthly/quarterly. Loan approval typically in 24–48 hours post-documentation.
      • Additional Features: No funding for second-hand machinery. Term, demand, or deferred payment guarantee available. Integration with PMEGP/PMMY schemes for subsidies. Online application and tracking via UCO Bank portal. \ SC/ST rejection approvals require higher authority clearance.
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Benefits of UCO Bank Machinery Loans

  • Access to Modern Equipment for Business Growth: Machinery loans enable businesses to purchase new, advanced machinery or equipment, enhancing productivity, efficiency, and product quality. Supports expansion by allowing MSMEs to scale operations, modernize facilities, or diversify product lines. For example, manufacturing units can acquire automated machines, while service businesses can invest in specialized equipment to improve service delivery.
  • Competitive and Affordable Interest Rates: Interest rates are linked to the UCO Float Rate (around 9.30% as of recent data) with additional spreads based on loan amount and credit profile. UCO Udyog Bandhu Loan: Rates start at ~9.85% p.a. for loans up to ₹10 lakh. UCO Roop Sangam Loan: Lower rates (~7.45% p.a. in 2020) for women entrepreneurs.
    • Collateral-Free Loans for Small Businesses: Loans up to ₹10 lakh are covered under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) or CGFMU (Credit Guarantee Fund for Micro Units), requiring no collateral.
    • Flexible Repayment Terms: Loan Tenure: Up to 5 years (60 months), with a moratorium period of 6 months to 1 year depending on the project. Repayment schedules are tailored to business cash flows and sustainability.
    • Quick and Hassle-Free Processing: Applications processed within 24–48 hours (subject to complete documentation). Online application options are available, reducing paperwork and improving convenience.
    • Support for Women Entrepreneurs: UCO Roop Sangam Loan offers lower interest rates (~7.45% p.a. in 2020) and relaxed collateral terms. Loan amounts up to ₹10 lakh for term loans and ₹3 lakh for working capital.
    • Integration with Government Schemes: Loans under schemes like PMEGP or PMMY offer subsidies and collateral-free lending up to ₹10 lakh.
    • High Loan Amounts for Large-Scale Needs: UCO Udyog Bandhu Loan: Up to ₹7.5 crore for medium enterprises. UCO Doctors Loan: Up to ₹3 crore for equipment in medical facilities.
    • No Prepayment Penalties (Conditional): No penalty for prepayment if paid through own funds. Only a nominal 1% fee may apply if repaid through a loan takeover by another bank.
    • Direct Disbursement for Proper Utilization: Loan disbursement goes directly to machinery suppliers to ensure proper use. Monthly or quarterly end-use verification is conducted for transparency.
    • Minimal Documentation for Smaller Loans: For loans up to ₹10 lakh, only basic KYC, business proof, and machinery quotations are needed. UCO Roop Sangam waives processing charges for loans up to ₹50,000.
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How to Apply for UCO Bank Farm Machinery Loans

  • 1. Check Eligibility
    • Farmers must own sufficient landholding:
      For tractors up to 35 HP: Minimum 6 acres of irrigated land or 12 acres of dry land.
      For tractors above 35 HP: Minimum 8 acres of irrigated land or 16 acres of dry land.
      Must ensure sufficient annual working hours (1,000-1,400 hours depending on HP).
    • Non-farming entrepreneurs must demonstrate income potential through custom hiring.
  • 2. Gather Required Documents:
    • Identity Proof: Aadhaar card, PAN card, Voter ID, or passport.
    • Address Proof: Aadhaar card, utility bill, or ration card.
    • Land Ownership Documents: Land records, patta, or title deeds.
    • Income Proof: Bank statements, ITR, or agricultural income proof.
    • Equipment Details: Quotation from approved supplier.
  • 3. Visit UCO Bank Branch:
    • Locate nearest UCO Bank branch (check website or call customer care).
    • Approach the agricultural banking section or loan officer.
    • Obtain and fill out the agricultural loan application form.
  • 4. Submit Application
    • Submit completed application form with all required documents.
    • Bank may request additional documents like soil test report or cropping pattern details.
  • 5. Loan Processing
    • Bank verifies documents and assesses eligibility.
    • Field visit may be conducted to verify land ownership.
    • Processing typically takes a few days after document verification.
  • 6. Loan Disbursement
    • Upon approval, loan amount is disbursed directly to equipment supplier.
    • Equipment is hypothecated to the bank as security.

Eligibility Criteria for UCO Bank Farm Machinery Loans

  • 1. Applicant Type:
    • Farmers engaged in agricultural activities with sufficient landholding.
    • Non-farming entrepreneurs capable of generating income through custom hiring.
    • Applicants should be Indian citizens and residents of India.
  • 2. Landholding Requirements:
    • For tractors up to 35 HP: Minimum 6 acres of irrigated land or 12 acres of dry land.
    • For tractors above 35 HP: Minimum 8 acres of irrigated land or 16 acres of dry land.
    • Must ensure 1,000-1,400 hours of annual work (depending on HP).
    • Land must be free from encumbrances or legal disputes.
  • 3. Equipment Specifications:
    • Equipment must be from UCO Bank's approved list of manufacturers.
    • Must suit the soil type, cropping pattern, and landholding size.
    • Equipment should meet the bank’s technical specifications to ensure quality and performance.
  • 4. Creditworthiness:
    • Satisfactory credit history with no overdue loans.
    • Ability to demonstrate repayment capacity based on agricultural income.
    • Applicants must have no prior defaults or adverse credit events in the last 2 years.
  • 5. Other Requirements:
    • Proof of land ownership through valid land records.
    • Equipment must align with agricultural needs of the land.
    • Applicants should have a minimum of 1-2 years of farming experience or agricultural operation history.
  • 6. Repayment Capacity:
    • Applicants must provide documentation to demonstrate their ability to repay, such as bank statements, ITR, or proof of agricultural income.
    • Income from farming operations should be stable, with a demonstrated history of consistent income generation.
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Documents Required for UCO Bank Farm Machinery Loans

  • 1. Identity Proof (any one):
    - Aadhaar card
    - PAN card
    - Voter ID
    - Passport
    - Driving license
  • 2. Address Proof (any one):
    - Aadhaar card
    - Utility bill (electricity, water, or telephone bill, not older than 3 months)
    - Ration card
    - Voter ID
    - Passport
  • 3. Land Ownership Documents:
    - Land records, patta, or title deeds proving ownership of the required landholding.
    - Revenue records or mutation documents to verify land details.
    - Certificate of land use or cropping pattern (if required by the bank).
  • 4. Income Proof:
    - Bank statements for the last 6-12 months showing agricultural income.
    - Income Tax Returns (ITR) for the last 2-3 years, if applicable.
    - Proof of income from custom hiring (for entrepreneurs).
  • 5. Equipment Details:
    - Quotation or proforma invoice from the supplier/dealer, specifying the equipment model, cost, and technical details.
    - Suitability certificate (if required) to confirm the equipment matches the land requirements.
  • 6. Loan Application Form:
    - Duly filled and signed agricultural loan application form.
  • 7. Photographs:
    - Two to four recent passport-sized photographs of the applicant.

Factors Related to Machinery for UCO Bank Loans

  • Approved Machinery List:
    - The machinery must be from UCO Bank's approved list of manufacturers or suppliers.
    - Includes specific models of tractors, power tillers, combine harvesters, and other agricultural implements.
  • Suitability of Machinery:
    - Must align with the soil type, cropping pattern, and landholding size of the farmer.
    - The bank may require a suitability certificate to confirm compatibility.
  • New vs. Used Machinery:
    -UCO Bank typically finances new machinery only to ensure longevity and performance.
    - Financing used machinery is rare and subject to strict conditions.
  • Economic Viability:
    - The machinery must demonstrate economic viability by generating sufficient income.
    - For farmers, equipment should achieve minimum working hours annually to cover loan repayments.
  • Cost and Valuation:
    - The machinery's cost must be reasonable and verified by a bank-approved valuer.
    - Loan amount is based on quoted cost, typically covering a significant portion of purchase price.
  • Hypothecation as Security:
    - The financed machinery is hypothecated to UCO Bank as primary security.
    - Applicants must maintain and insure the equipment as per bank requirements.
  • Technical Specifications:
    - Must meet technical and regulatory standards (e.g., BIS certification for agricultural equipment).
    - Non-compliant machinery may be rejected or require modifications.

Frequently Asked Questions (FAQs)

1. What are UCO Bank Machinery Loans?
UCO Bank offers two types of machinery loans:
- Farm Machinery Loans: For farmers to purchase agricultural equipment like tractors, combine harvesters, power tillers, sprayers, and ploughs.
- UCO Easy Equipment Finance: For MSME businesses (e.g., contractors) to finance construction and industrial equipment like JCBs, excavators, cranes, forklifts, and material processing machines.
2. What is the purpose of these loans?
Farm Machinery Loans: To enhance agricultural productivity and support mechanization by financing equipment suited to the farmer’s land and cropping pattern.
UCO Easy Equipment Finance: To enable MSMEs to acquire equipment for construction, infrastructure, or industrial projects, boosting business efficiency and growth.
3. Who can apply for these loans?
Farm Machinery Loans: Farmers with sufficient landholding (e.g., 6–8 acres of irrigated land or 12–16 acres of dry land, depending on equipment) and non-farming entrepreneurs engaged in custom hiring.
UCO Easy Equipment Finance: MSME clients (individuals, firms, companies) with at least 2 years of business vintage, registered with relevant authorities, and involved in contract execution (e.g., construction).
4. What are the eligibility criteria for Farm Machinery Loans?
Farmers must own:
- For tractors up to 35 HP: Minimum 6 acres of irrigated land or 12 acres of dry land, ensuring 1,000–1,200 hours of annual work (500 hours on own land).
- For tractors above 35 HP: Minimum 8 acres of irrigated land or 16 acres of dry land, ensuring 1,200–1,400 hours of annual work (600 hours on own land).
Non-farming entrepreneurs must show income potential through custom hiring.
Satisfactory credit history with no overdue loans.
Equipment must be from the bank’s approved list.
5. What are the eligibility criteria for UCO Bank Easy Equipment Finance?
MSME clients (individuals, firms, companies) with:
- Minimum 2 years of business vintage.
- Registration and valid licenses for contract execution.
- For existing clients: At least 1 year of satisfactory dealing with UCO Bank and a sanctioned working capital limit.
- No overdue loans with any bank or financial institution.
Excludes trusts, societies, trade contractors, and equipment suppliers.
6. How can I apply for a machinery loan?
Visit a UCO Bank branch and consult the loan officer (agricultural section for farmers, MSME section for businesses).
Submit the required application form (agricultural loan form for farmers, NF998 MSME form for businesses) along with documents.
The bank will verify documents, assess eligibility, and disburse the loan upon approval, typically directly to the equipment supplier.
7. Can I apply online for these loans?
UCO Bank primarily processes machinery loans through branches. However, you can check UCO Bank's official website for any online pre-qualification tools or application options, particularly for MSME loans. Confirm with the branch for the latest process.
8. What documents are required for Farm Machinery Loans?
- Identity proof (Aadhaar, PAN, voter ID, etc.).
- Address proof (Aadhaar, utility bill, ration card, etc.).
- Land ownership documents (land records, patta, title deeds).
- Income proof (bank statements, ITR, or agricultural income proof).
- Equipment quotation from an approved supplier.
- Filled agricultural loan application form.
- Passport-sized photographs.
Optional: Soil test report, cropping pattern details, or no-dues certificate.
9. What documents are required for UCO Easy Equipment Finance?
- Identity and address proof (Aadhaar, PAN, etc.) for applicant and business.
- Business documents (registration certificate, GST registration, partnership deed, MOA/AOA).
- Financial documents (3 years’ audited financials, ITR, bank statements, projected financials).
- Equipment quotation and valuation report.
- NF998 MSME loan application form.
- Guarantor documents (if required).
- Collateral documents (e.g., property deeds) for higher loan amounts.
- Passport-sized photographs.
Optional: No-dues certificate, stock statement, or contract agreements.
10. Do I need to provide collateral?
Farm Machinery Loans: Typically, the financed equipment is hypothecated as primary security; additional collateral is rarely required.
UCO Easy Equipment Finance: The equipment is hypothecated, but additional collateral (e.g., property or bank deposits) may be needed for larger loans.
11. What types of machinery can be financed?
Farm Machinery Loans: Tractors, power tillers, combine harvesters, sprayers, dusters, ploughs, drills, and other agricultural implements.
UCO Easy Equipment Finance: JCBs, earthmovers, compactors, loaders, forklifts, cranes, excavators, RMC plants, graders, concrete pumps, and DG sets.
12. Does the machinery need to be from a specific supplier?
Yes, the machinery must be from UCO Bank’s approved list of manufacturers or authorized suppliers to ensure quality and reliability. Obtain a quotation from an approved dealer.

List of UCO Bank On Machinery Loans

  • UCO Udyog Bandhu Loan
  • UCO Roop Sangam Loan
  • UCO Doctors Loan
  • PMEGP (Prime Minister’s Employment Generation Programme) Loan
  • UCO Shishu Mudra Loan
  • UCO Kishore Mudra Loan
  • UCO Tarun Mudra Loan
  • UCO MSME Term Loan
  • UCO Composite Loan (for machinery and working capital)
  • UCO Stand-Up India Loan
  • UCO Weaver Mudra Loan
  • UCO Artisan Credit Card Loan
  • UCO SME Loan for Women Entrepreneurs
  • UCO Priority Sector Loan for Machinery Purchase
  • UCO CGTMSE-Backed Machinery Loan