Manufacturing Equipment Loan - Capital Allowances 2026

2026 Manufacturing Equipment Guide

Manufacturers need machines. CNC machines, lathes, forklifts, generators. Equipment costs impact cash flow. Smart financing matters.

This guide explains manufacturing equipment loans. Capital allowances. Bank vs alternative financing. Real numbers for 2026 budgeting.

Manufacturing Equipment Prices

CNC Machinery

• CNC Lathe: RM80,000 - RM150,000
• CNC Milling: RM120,000 - RM250,000
• Used CNC (5 years): RM50,000 - RM100,000

Warehouse Equipment

• 3-ton forklift: RM55,000 - RM75,000
• 5-ton forklift: RM90,000 - RM120,000
• 10-ton overhead crane: RM180,000 - RM250,000

Power Equipment

• 500 kVA generator: RM70,000 - RM120,000
• 1000 kVA generator: RM130,000 - RM180,000
• Compressor system: RM45,000 - RM80,000

Bank Manufacturing Equipment Loans

Typical Bank Terms

• Interest rate: 4.6% - 6.0% per year
• Maximum loan: 90% of equipment value
• Down payment: 10% - 20% required
• Equipment age limit: 5 years maximum
• Processing: 3 - 4 weeks

Real Example: CNC Lathe

Equipment price: RM120,000

Bank Offer:
• Down payment: RM12,000 - RM24,000
• Loan amount: RM96,000 - RM108,000
• Monthly payment: RM1,600 - RM1,800
• Interest over 7 years: RM37,000 - RM45,000

Issue: Cash tied up upfront. Used equipment often rejected.

Ing Heng Credit Manufacturing Loans

Our Equipment Loan Terms

• Interest rate: Competitive rates
• Maximum loan: 100% full financing
• Down payment: 0% zero deposit
• Equipment age: No age limit
• Processing: 24 - 48 hours

Same CNC Lathe with Us

Equipment price: RM120,000

Ing Heng Offer:
• Down payment: RM0 (0%)
• Loan amount: RM120,000
• Monthly payment: RM1,650
• Cash preserved: RM12,000 - RM24,000

Capital Allowances 2026

Manufacturing Equipment Depreciation

Initial Allowance (Year 1):

• General industrial plant: 20% - 40%
• Small value assets (under RM2,000): 100%

Annual Allowance (Year 2 onwards):

• General industrial plant: 10% - 20%
• Balance writing down method applies

Tax Calculation Example

CNC Lathe: RM120,000

Year 1 (40% initial): RM48,000 tax deduction
Year 2 (20% annual): RM14,400 tax deduction
Year 3 (20% annual): RM11,520 tax deduction
Continues until fully depreciated

Total tax savings: 24% corporate tax on deductions = Significant reduction in tax liability.

Manufacturing Budget Scenarios

New Production Line

Setting up new manufacturing line. Need CNC machine, forklift, generator.

Equipment total: RM285,000

Bank: RM28,500 - RM57,000 down payment
Ing Heng: 0% down, full financing

Equipment Upgrade

Replacing old machine with newer model.

Equipment: Used CNC (RM80,000)

Bank: Rejected (6 years old)
Ing Heng: Approved 100% financing

Warehouse Expansion

Adding forklifts for expanded warehouse.

Equipment: 2 × forklifts (RM130,000)

Bank: RM13,000 - RM26,000 down payment
Ing Heng: 0% down, RM13,000 - RM26,000 preserved for raw materials

Why 0% Down Helps Manufacturing

Manufacturing needs working capital. Raw materials, wages, utilities, maintenance. Every dollar counts.

RM20,000 down payment = 1 month raw materials. Or 2 weeks wages. Or 3 months utilities.

0% down keeps production running. Equipment installed immediately. Cash preserved for operations.

Used Equipment Financing

Many manufacturers sell quality used equipment. 5-10 year old machines still have 10+ years life.

Banks reject over 5 years. We finance based on condition. Any age. Any brand.

Fast Approval for Production Deadlines

Production contract awarded. Need equipment next week. Bank takes 3-4 weeks.

We approve in 24-48 hours. Equipment installed. Production starts on time. Contract fulfilled.

2026 Manufacturing Equipment Tips

• Plan equipment purchases for production schedule
• Calculate capital allowance tax benefits
• Consider used equipment for cost savings
• Preserve cash for raw materials and operations
• Match loan term to equipment productive life