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Equipment Financing

Term Loan 2026 - Business Expansion Equipment

Term Loan for equipment purchase 2026. Business expansion financing with flexible repayment.

Ing Heng Credit Team • • 5 min read

Term Loan 2026 - Business Expansion Equipment

Term Loan offers flexible financing for business expansion. Here's what you need to know in 2026.

What is Equipment Term Loan?

Term Loan means:

  • Fixed amount borrowed
  • Regular monthly repayments
  • Specific loan term (1-7 years)
  • For business equipment purchase

Term Loan vs Hire Purchase 2026

Feature Term Loan Hire Purchase
Purpose Any business use Equipment specific
Collateral Equipment + other Equipment only
Down Payment 0-20% 0-20%
Interest Type Reducing balance Flat rate
Early Settlement Lower penalty Higher penalty
Flexibility Higher Lower

Who Needs Term Loan?

Best for:

  • Business expansion projects
  • Multiple equipment purchases
  • Working capital + equipment
  • Renovation + equipment
  • Fleet expansion (5+ units)
  • New branch setup

Real Example: Fleet Expansion

Scenario: Logistics company expanding

Needs:

  • 5 lorries (RM 600,000)
  • 3 forklifts (RM 135,000)
  • Warehouse renovation (RM 200,000)
  • Total: RM 935,000

Hire Purchase approach:

  • Separate HP for each equipment
  • Higher total interest
  • Multiple applications
  • Renovation not covered

Term Loan approach:

  • Single RM 935,000 loan
  • Lower overall interest
  • One application
  • Covers everything

Term Loan Structure 2026

Loan Amount: RM 50,000 - RM 5,000,000

Repayment Terms:

  • 1 year (12 months)
  • 3 years (36 months)
  • 5 years (60 months)
  • 7 years (84 months)

Interest Calculation:

  • Reducing balance method
  • Principal decreases monthly
  • Interest on outstanding only
  • Total interest lower than HP

Bank vs Ing Heng Term Loan 2026

Feature Bank Term Loan Ing Heng Term Loan
Min Loan Amount RM 500,000 RM 50,000
Collateral Equipment + property Equipment only
Down Payment 20% required 0% possible
Interest Rate 4.5-6.0% 5.0-6.5%
Approval 2-4 weeks fasts
Equipment Age Under 5 years No limit

Term Loan Interest Comparison

Example: RM 300,000 loan, 5 years

Hire Purchase (Flat 5%):

  • Total interest: RM 75,000
  • Monthly: RM 6,250
  • Total paid: RM 375,000

Term Loan (Reducing 6%):

  • Total interest: ~RM 48,000
  • Monthly: ~RM 5,800
  • Total paid: RM 348,000
  • Savings: RM 27,000

2026 Term Loan Benefits

  1. Lower Total Interest - Reducing balance method
  2. Flexible Use - Equipment + working capital
  3. Larger Amounts - Up to RM 5 million
  4. Longer Terms - Up to 7 years
  5. No Equipment Restriction - Any brand/age

Equipment Eligibility

Term Loan Suitable For:

  • Mixed fleet purchases
  • Equipment + renovation
  • Multiple equipment types
  • New + used equipment
  • Specialized machinery

Example Bundle:

  • 2 excavators (RM 360,000)
  • 1 lorry (RM 120,000)
  • 2 forklifts (RM 90,000)
  • Office renovation (RM 150,000)
  • Total Term Loan: RM 720,000

Documentation Required

  1. Business Documents

    • SSM registration
    • 2 years operation (preferred)
    • Latest audited accounts

  2. Financial Documents

    • 6 months bank statements
    • Latest EPF statements
    • Tax clearance (if applicable)

  3. Project Details

    • Equipment quotations
    • Business plan
    • Cash flow projection

Term Loan vs Line of Credit

Term Loan:

  • Fixed amount
  • Regular repayments
  • For specific projects
  • Lower interest rate

Line of Credit:

  • Revolving facility
  • Use as needed
  • For working capital
  • Higher interest rate

Best option: Term Loan for equipment + expansion

Bad Credit Term Loan

Banks require:

  • Strong financials (2+ years)
  • High collateral coverage
  • Clean CCRIS record
  • Large down payment

Ing Heng offers:

  • Lower documentation
  • Equipment-focused approval
  • Bad credit considered
  • 0% down payment possible

2026 Term Loan Approval Criteria

Primary Considerations:

  1. Equipment value and condition
  2. Business cash flow
  3. Loan purpose viability
  4. Collateral coverage
  5. Management experience

We Focus On:

  • Equipment quality primary
  • Business viability
  • Repayment capacity
  • Future potential

Term Loan Use Cases

Construction:

  • Equipment fleet expansion
  • New branch setup
  • Heavy machinery purchase
  • Project-specific financing

Logistics:

  • Fleet addition (5+ lorries)
  • Warehouse expansion
  • Forklift fleet upgrade
  • Technology systems

Manufacturing:

  • Production equipment
  • Factory expansion
  • Machinery upgrade
  • Automation systems

Repayment Structure Options

Equal Monthly Installment:

  • Same payment throughout
  • Easy budgeting
  • Most common

Step-Up Repayment:

  • Lower initial payments
  • Increases over time
  • For growing businesses

Balloon Payment:

  • Lower monthly
  • Large final payment
  • Refinance option available

Early Settlement Benefits

Term Loan Advantages:

  • Lower early settlement penalty
  • Interest saved on early payment
  • Flexible settlement options
  • No lock-in period (some cases)

Get Term Loan Assessment

Need term loan for business expansion? Contact Ing Heng for fast approval and flexible terms.

Equipment only? See Hire Purchase Guide.

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