Term Loan 2026 - Business Expansion Equipment
Term Loan for equipment purchase 2026. Business expansion financing with flexible repayment.
Ing Heng Credit Team β’ β’ 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 | 48-72 hours |
| **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.
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**Equipment only?** See [Hire Purchase Guide](/blog/hire-purchase-2026-complete-equipment-guide-malaysia).