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

Lower Total Interest - Reducing balance method
Flexible Use - Equipment + working capital
Larger Amounts - Up to RM 5 million
Longer Terms - Up to 7 years
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

Business Documents

SSM registration
2 years operation (preferred)
Latest audited accounts

Financial Documents

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

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:

Equipment value and condition
Business cash flow
Loan purpose viability
Collateral coverage
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 Streamlined Processing and flexible terms.

Equipment only? See Hire Purchase Guide.