Machinery Quotation Format for Bank Loan: What to Include, a Sample You Can Copy, and the Mistakes That Make Banks Send It Back

Anita runs a small garment unit in Tiruppur with four tailors. To take bulk orders she needed a semi-automatic embroidery machine. She found a dealer, got a price on a WhatsApp message, "Machine 4 lakh, GST extra, delivery 15 days", and took a screenshot to the bank along with her project report.

The officer read it twice. "This is not a quotation, madam. There is no company name, no GST number, no model, no date. Anyone could have typed this."

Anita went back to the dealer, who sent a proper letterhead quotation. It had a model number, the total with GST and a validity date. But now the machine cost on the quotation was Rs.4,72,000, while her project report still said Rs.4,00,000. The numbers did not match, and the officer sent the file back again.

Two trips, two weeks lost, one machine she could have bought by then. Neither mistake was about the loan. Both were about a piece of paper.

This guide shows what a machinery quotation should contain for a bank or Mudra loan, gives a sample format you can hand to a dealer, explains how the quotation numbers feed your project cost and means of finance, and lists the mistakes that make banks send it back.

(This story is fictional. Names, places and amounts are examples only.)

QUICK ANSWER

A machinery quotation for a bank loan should be on the supplier's letterhead and show the supplier's name, address, GSTIN and contact details, the quotation number and date, the buyer's name, a clear machine description with make, model and specifications, quantity, unit price, GST shown separately, total price, delivery, installation and warranty terms, payment terms and a validity date, with a signature or stamp. The total on the quotation, plus freight and installation, must match the plant and machinery line in your project cost. Get quotations from registered suppliers, and many banks like two or three for comparison. Requirements vary by lender, so ask yours which format it accepts.

1. Why banks ask for a quotation

A bank lending for machinery wants to know three things: what exactly you are buying, what it really costs, and who is selling it. A quotation answers all three. It turns "I need a machine" into a defined item with a price and a named seller.

It also protects the bank and you. A quotation limits the chance that the loan amount is used for something else, because the loan is sized to a documented cost. And it helps the officer check that your project report is realistic. A standard guide to bank-ready MSME project reports lists quotations for plant, machinery and equipment from registered suppliers among the required documents, and says those figures feed the project cost breakup, which must match the means of finance exactly.

If you are applying for a Mudra loan with MudraReady's project report, the machinery quotation for a Mudra loan is the document that proves the "plant and machinery" row of your cost table.

2. Quotation, proforma invoice, estimate: what is the difference

People use these three words loosely, and dealers do too. Banks treat them differently, so it helps to know what each is.

Table 1: Quotation, proforma invoice and estimate compared

The line between a quotation and a proforma invoice for a bank loan is thin in practice. Some banks ask for a proforma invoice because it shows tax details clearly. Ask your branch which one it wants, and if in doubt, ask the dealer for a quotation that includes the tax breakup so it works for either.

3. The 12 things a quotation must contain

There is no single government machinery quotation format for a bank loan. What follows is common practice, and it is what an officer usually looks for. Your bank may add its own points.

Table 2: The 12-point machinery quotation checklist

If a quotation has these twelve points, it will satisfy most officers. If it lacks the model number, the GST breakup or the validity date, expect a request to redo it.

4. A sample format you can copy

This machinery quotation format for a bank loan is one you can hand to your dealer, or use it to check what the dealer sends. Replace the bracketed parts.

[SUPPLIER LETTERHEAD: name, address, phone, email, GSTIN]

QUOTATION Quotation No.: [number] Date: [dd/mm/yyyy] Valid until: [dd/mm/yyyy]

To: [Your firm name] [Your address] [Udyam number, if available]

Subject: Quotation for supply of [machine name]

TABLE: Item details

Freight and transport: [included or Rs. amount] Installation and commissioning: [included or Rs. amount] Grand total: Rs. [amount] (in words: [amount in words])

Terms:

• Delivery: [number of days] from receipt of advance
• Payment: [advance percent / balance on delivery]
• Warranty: [period and what it covers]
• After-sales service and spares: [details]
• Validity: this quotation is valid until [date]

Authorised signatory: [name, designation, signature and stamp]

This is a layout, not a legal form. The goal is clarity, so that an officer who has never seen the machine can tell exactly what is being bought and for how much.

5. How the quotation feeds your project cost

The quotation total is the main number in your project cost, but it is not the only one. Anything you must pay to get the machine working belongs in the cost. Think of it as everything between "the machine is at the dealer" and "the machine is making product."

Table 3: Cost items that sit around the quotation (udaharan)

GST treatment depends on your registration and whether you can claim input tax credit. A registered business that can claim credit may be able to treat the GST differently from one that cannot. Ask your CA or the bank how they want it shown, and make sure the project report and quotation follow the same treatment.

The golden rule: every rupee in the machinery row of the project report should trace back to a document. If the officer can tick every line against a paper, the file moves fast.

6. Worked example: cost, loan and EMI

Back to Anita. After the second quotation, her real figures were as follows. The GST rate of 18% is assumed here for the example, and the actual rate depends on the machine, so check it with your dealer.

Table 4: Anita's project cost and means of finance (udaharan)

Her original project report showed a cost of Rs.4,00,000 because it used the dealer's price before GST, freight and installation. That is the mismatch that cost her a trip.

Now the repayment. At 11% over 60 months, the EMI on Rs.4,00,000 is Rs.8,697, or Rs.1,04,364 a year. For DSCR, the convention is annual operating profit before loan payments divided by yearly debt service, with interest not counted twice because the EMI already includes it.

Table 5: Anita's DSCR at different profit levels (udaharan)

These profit levels are illustrative. In your own report they must come from your order book and cost sheet, not from hope. The point is the chain: quotation to project cost to loan to EMI to DSCR. A break anywhere in the chain is what officers catch.

Table 6: How a different rate changes the EMI on Rs.4,00,000 over 60 months (udaharan)

7. New vs second-hand machinery

Most Mudra and MSME term loans, and the quotation for a machinery loan behind them, are straightforward when the machine is new from a registered dealer. A second-hand machine is another matter. A seller may not issue a proper tax invoice, the true value is hard to confirm, and the bank may want an independent valuation or may decline to finance it at all. Policies differ from bank to bank, so I will not state a rule. If you plan to buy second-hand, ask the branch before you pay a deposit.

For a second-hand purchase, ask the bank what it needs. Typical items it may ask about include the seller's identity and ownership proof, the machine's age and condition, a valuation or inspection report, and how payment will be made. If any of these cannot be produced, the safer route is often a new machine, or a smaller, cheaper new one.

Table 7: New vs second-hand: what to check

8. How many quotations and from whom

Many banks like to see more than one quotation so that they can see the price is reasonable. Two or three quotations from different suppliers for the same specification is a common practice. Whether it is required depends on the lender and the loan size, so confirm with your branch.

When you collect quotations, make them comparable. Ask each supplier for the same capacity, the same accessories and the same terms. A machine quotation sample is only useful if the specs match: a quotation for a 3 horsepower machine cannot be compared with one for a 5 horsepower machine.

Then choose on value, not only price. The cheapest quote may have no warranty or no service centre in your region. Write one short paragraph in your project report explaining why you chose the supplier, and attach all quotations. This shows the bank you did a real comparison.

Prefer registered suppliers with a GSTIN, a business address you can verify, and a record of other customers. If you can, visit the supplier or see the machine running at another customer's site before you commit.

9. Common mistakes and how to avoid them

Table 8: Mistakes that delay a machinery loan

10. What to do after the loan is sanctioned

The quotation is not the end. After sanction, banks typically want to see that the loan was used for the planned purpose. That usually means a tax invoice from the supplier, proof of delivery, and sometimes an inspection of the machine. Some banks release funds directly to the supplier against the invoice instead of to the borrower. Ask your branch how it works at your bank.

Keep the tax invoice, the delivery challan, the installation report and the warranty card together in one file. If the final price differs from the quotation, tell the bank early rather than letting it find out at inspection.

11. Step-by-step: getting a bank-ready quotation

Step 1: Decide the exact machine you need, with capacity and features, based on your order plan. Step 2: Ask your bank which document it wants: quotation, proforma invoice, or both. Step 3: Shortlist two or three registered suppliers and note their GSTIN and address. Step 4: Send each the same specification so that the quotations are comparable. Step 5: Ask each supplier to use the 12-point checklist above, with GST shown separately. Step 6: Check the firm name, date, model, total and validity on every quotation. Step 7: Add freight, installation and any civil or electrical work to get the real project cost. Step 8: Copy the totals into your project report and make sure the means of finance adds up. Step 9: Attach the quotations to your application with a short note on why you chose one supplier. Step 10: Do not pay a large advance until the loan is sanctioned, and pay only through traceable banking channels.

Rejection Ke Udaharan: Bank Ne Kya Kaha Aur Fix Kya Hai

Case 1: Anita, 35, Tiruppur

What happened: She submitted a WhatsApp screenshot as her quotation.

What the bank said: "This is not a quotation. We need a company name, GST number and model."

Exact fix: She got a signed letterhead quotation with the 12 points and matched her project report to the new total.

Case 2: Balwinder, 46, Amritsar

What happened: His quotation had expired a month before he applied.

What the bank said: "The validity date has passed. Please bring a current quotation."

Exact fix: He asked the dealer for a fresh quotation and checked the validity date before submitting.

Case 3: Farhan, 32, Kanpur

What happened: He submitted one quotation from a supplier with no GSTIN and no address.

What the bank said: "We cannot verify the supplier."

Exact fix: He collected two more from registered suppliers with GSTIN and addresses, and attached a short comparison.

Case 4: Lalitha, 41, Coimbatore

What happened: Her quotation showed the price "plus GST", with no amount, and her project report left the GST out.

What the bank said: "Your project cost is understated."

Exact fix: She got the GST shown as a separate line, rebuilt the project cost and adjusted her own contribution.

Case 5: Mohan, 50, Raipur

What happened: He paid Rs.60,000 as advance to an unknown dealer before sanction, and the dealer stopped answering.

What the bank said: "We cannot finance a purchase from an unverified seller."

Exact fix: He filed a complaint at cybercrime.gov.in, took advice on recovery, and started again with a verified supplier, paying only after sanction.

Fraud Se Kaise Bachein

Fake machinery dealers advertise low prices online, collect an advance and disappear. Never pay a large advance to a supplier you have not verified, and never pay a "loan processing" amount to anyone who says it will secure approval. Check the supplier's GSTIN, address and other customers, and pay by traceable channels. The PIB Fact Check unit has flagged fake Mudra approval letters asking for fees such as Rs.350 (12 July 2026), Rs.6,550 (21 June 2026) and Rs.7,699 (March 2026).

• Mudra does not appoint any agent or middleman.
• Approval never comes through WhatsApp or social media.
• Loans are given only by banks, NBFCs and MFIs, and no advance fee is charged for approval.
• Anyone asking for money as a "subsidy", "processing" or "loan release" fee is running a fraud.

What to do:

• Do not send money.
• Do not share OTP, Aadhaar or bank details.
• Verify at the branch in person.
• Report at cybercrime.gov.in or call 1930.

Full guide: https://mudraready.in/blog/mudra-loan-fraud-fake-call-whatsapp

Myths vs Facts

Myth 1: A WhatsApp price message is enough.

Fact 1: Banks usually want a formal quotation on the supplier's letterhead with identification and terms. A chat message can be created by anyone.

Myth 2: The machine price alone goes into project cost.

Fact 2: GST, freight, installation and any related work are also part of the cost, and your project report should include them.

Myth 3: There is one government format for the quotation.

Fact 3: There is no single prescribed format. The content matters more than the layout, and your bank may have its own requirements.

Myth 4: Any quotation will do, even from an unknown seller.

Fact 4: Banks prefer registered suppliers whose identity and price can be verified.

Myth 5: Paying an advance first will speed up the loan.

Fact 5: It only puts your money at risk. Pay large amounts after sanction and only to verified sellers.

Myth 6: A second-hand machine is always cheaper to finance.

Fact 6: It can be harder because of valuation, invoice and ownership issues. Ask the bank before you pay anything.

FAQs

What is a machinery quotation for a bank loan?

It is a formal price offer from a supplier for a defined machine, showing make, model, specifications, quantity, price with GST, delivery, warranty, payment terms and validity. The bank uses it to confirm what you are buying and to size the loan to a documented cost.

What should a machinery quotation contain?

Supplier name, address, GSTIN and contact details, quotation number and date, buyer name, machine description with model and specifications, quantity, unit price, GST shown separately, total price, delivery and installation terms, warranty, payment terms, validity date and a signature or stamp.

Is a proforma invoice accepted instead of a quotation?

Many lenders accept a proforma invoice, sometimes along with a quotation, because it shows tax details clearly. Practice differs by bank, so ask your branch which document it wants. If unsure, ask the dealer for a quotation that includes the full tax breakup.

How many quotations do I need?

Many banks like two or three from different suppliers for the same specification so they can judge whether the price is reasonable. The requirement varies by lender and loan size, so confirm with your branch, and attach a short note on why you chose your supplier.

Should GST be included in the project cost?

Usually the project cost should reflect the total you will actually pay, including GST, unless you can claim input credit and the bank treats it differently. Whatever you choose, keep the quotation and the project report consistent, and ask your CA or bank how they want it shown.

Can I use a quotation for a Mudra loan?

Yes. For machinery purchases under a Mudra loan, a supplier quotation supports the plant and machinery row of your project report and shows what the loan will be used for. Your lender may also ask for a tax invoice after purchase to confirm the loan was used as planned.

Can I finance a second-hand machine?

It depends on the lender. Banks may ask for an independent valuation, proof of ownership and a proper invoice, and some decline second-hand purchases. Speak to your branch before paying any deposit, and consider a new machine from a registered dealer if documents cannot be produced.

How long is a quotation valid?

The supplier decides and writes the validity date on the document, often a few weeks. A bank will not accept an expired quotation, so check the date before you submit and ask for a fresh one if the sanction is taking longer than expected.

What if the final price differs from the quotation?

Tell the bank early. A small change may be handled with a revised quotation or the tax invoice, but a large gap can mean a different loan amount or a request for more own contribution. Never keep it quiet until inspection, because it damages trust.

Should I pay the dealer an advance before the loan is sanctioned?

Avoid large advances. If the loan is not approved you may lose money, and fake dealers are a known risk. Pay only a small booking amount if truly needed, use traceable payment, keep receipts, and pay the balance once the bank sanctions and releases the loan.

Conclusion

A machinery quotation looks like a small formality, but it quietly decides how fast your file moves. It tells the bank what you are buying, what it costs and who is selling it, and it anchors the project cost, the loan amount, the EMI and the DSCR.

Anita lost two weeks because of two avoidable things: a screenshot instead of a quotation, and a project report that used the price before GST, freight and installation. Once she had a signed letterhead quotation, a project cost of Rs.4,92,000, a loan of Rs.4,00,000, an EMI of Rs.8,697 and a DSCR above 1.7, the same officer had nothing to send back.

Your checklist for the machinery quotation format for a bank loan is short. Use the 12 points. Show GST separately. Include freight and installation. Make the project report match the quotation to the rupee. Check the validity date. Prefer registered suppliers, and do not pay a large advance before sanction.

When the quotation is ready, the project report should be too. MudraReady builds a bank-ready report with cost, means of finance, EMI and DSCR laid out the way bankers read them, using your quotation figures. Your first report is free, and after that each report is Rs.499.

Generate your report: https://mudraready.in/generate-your-mudra-report

More to read: https://mudraready.in/blog/mudra-loan-eligibility-english | https://mudraready.in/blog/mudra-loan-documents-list-hindi | https://mudraready.in/blog/why-banks-reject-mudra-loans

Sources

• Finline, Project report for MSME loan application (quotations from registered suppliers as a required document; project cost must match means of finance): https://www.finline.in/page/project-report-for-msme-loan-application
• MUDRA official (scheme tiers, lending institutions): https://www.mudra.org.in
• Udyamimitra portal: https://www.udyamimitra.in
• PIB Fact Check, fake Mudra letter (Rs.6,550 fee, 21 June 2026): https://newsonair.gov.in/pib-fact-check-debunks-fake-claim-on-pradhan-mantri-mudra-yojana/
• PIB Fact Check, fake Mudra letter (Rs.350 fee, 12 July 2026): https://newsonair.gov.in/govt-debunks-fake-approval-letter-claiming-to-grant-loan-under-pmmy-on-payment-of-rs-350-as-processing-fee/
• Fake Mudra Rs.3 lakh loan offer alert (Rs.7,699 fee, March 2026): https://www.angelone.in/news/personal-finance/pm-mudra-loan-scam-alert-pib-fact-check-flags-fake-3-lakh-loan-offer
• Cyber crime reporting: https://cybercrime.gov.in

Note: the 12-point checklist is common practice compiled from standard quotation contents, not a government-prescribed format. Banks may vary.

Disclaimer

This information is for education only. Loan approval depends on the lender's policy, your repayment capacity and your documents. MudraReady does not give loans and does not guarantee approval. Scheme rules can change, so confirm with your bank or the official website.

Last Updated: October 2026