Best Business Loans for Manufacturing Companies

The Manufacturing Industry is driven by the execution of the products they are manufacturing. To operate an efficient manufacturing business, you must have great equipment/machines, proper supply, a proper process, and structure in manufacturing from beginning to end and an efficient and accountable workforce so a quality product can be delivered. Having a proper business credit facility is essential to help the business function and operate properly. Whether it’s getting more efficient machines to improve the factory line and overall process or purchase supply in bulk at a discount, business funding is necessary to maintain and or build the business.

AdvancePoint Capital can provide working capital to manufacturing companies like yours for running the business.

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The 6 Best Business Loan Options for Manufacturing Companies:

 

Business Line of Credit for Manufacturing Companies

A business line of credit is a type of small business loan that offers a flexibility feature that a short term loan does not. It works like a credit card in that it is a revolving line of credit and allows you to draw money out and then repay at any time with you only paying principal and interest on your outstanding balance. The product has a credit limit that you cannot exceed and is set at the time of consummation.

Highlights of Short-Term Business Loans:

  • Lower costs and fees than that of short-term loans
  • Only responsible for principal and interest on the outstanding balance
  • Draw money out as you need it instead of a lump sum

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Short Term Business Loans for Manufacturing Companies

A Short Term Business Loan offers a fixed amount over a fixed term with a fixed factor cost, unlike that of a principal and interest loan. Payments are usually set up to be paid either monthly or weekly directly out of business bank account via ACH based on the term and payback amount.

Highlights of Business Line of Credit:

  • Same day to 24-hour funding
  • All types of credit considered from Excellent to Poor credit
  • Limited paperwork needed for approval 
  • Easier approval qualifications than that of a business line of credit

 

Equipment Loans for Manufacturing Companies

At the heart of any Manufacturer are the machines and/or equipment. Many times the cost to upgrade equipment well exceeds the available cash flow to support the purchase. Equipment financing is used to enable the manufacture to develop new product lines, improve quality controls, reduce the need for labor cost, and improve the overall business process and structure. When purchasing equipment, you are securing that equipment as collateral like you would when purchasing a truck or automobile. Equipment financing is usually structured as a lease to purchase or fixed-term loans. 

Highlights of Equipment Financing:

  • Minimal paperwork required
  • Repayment terms from 1 to 7 years
  • Affordable monthly payments
  • Frees up cash flow instead of depleting company cash reserves to purchase

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SBA (Small Business Administration) Loans for Manufacturing Companies

The most popular, yet most difficult option is an SBA loan, short for Small Business Administration loan, which is a loan guaranteed by the Small Business Administration. Due to the fact that this loan is backed by the SBA, the rates and terms are more attractive than any other type of business financing, but qualifications are tougher on credit. Be prepared; it will take time to get approved, weeks not days. 

Highlights of SBA Loans:

  • Repayment terms from 1 to 25 years
  • Interest Rates as low as 7%
  • Monthly payments
  • No restrictions on the use of money

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Invoice Factoring / Financing for Manufacturing Companies

Invoice factoring/financing is a financial transaction type of debtor finance. This product allows manufacturers to get an advance on their receivable invoices from their clients. Invoice factoring allows the manufacturer to leverage outstanding invoices and receive advances off those invoices ahead of the “net” terms of 30, 60 days the invoices normally take to get paid. Basically, it’s a sale of a receivable (invoice) to a third party (factoring company)

Highlights of Invoice Financing:

  • Super-fast access to capital
  • Credit requirements based on your customer, not your business
  • Low fees, typically less than 2% of the invoice 
  • No monthly payments, no long term debt obligations, no account receivable to collect

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Business Credit Cards for Manufacturing Companies

Business Credit Cards function and operate the same as personal credit cards, which are revolving lines of credit with the use of a card with a specific account number. Credit cards are a great solution to smaller immediate purchases, and a means to pay for supplies, bills, equipment, and other small items. 

Highlights of Business Credit Cards:

  • Revolving principal and interest cost
  • Builds positive business credit
  • Easy to manage and use
  • Minimum monthly payments

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Benefits of Manufacturing Business Loans

Cash Flow

Managing cash flow can always be difficult. Manufacturers always are chasing invoices from their customers to get paid. Sometimes, the investment in a new client with equipment, supply, and labor cost before a manufacturing company gets paid can be many months. Therefore, adding new projects/clients can be a real challenge without access to some type of credit facility like a business line of credit. Business financing in place can solve that problem by filling those short to long term issues like customer payment delays, supply and equipment purchases, payroll, and general operating expenses. 

Owning Your Own Equipment

Machines and Equipment are the foundation for efficiency for a manufacturer. Repairs and upgrades of Equipment are always going to be in the plans for a manufacturer. In some cases, new equipment can entirely revolutionize the way the manufacturer’s process work creating great efficiencies and cost savings in the long run. Accessing equipment financing allows the business to purchase new equipment to gain new clients, operate more efficiently, and in some cases, reduce labor costs and profit margins.

Hire Employees and Managing a Growing Team

Machines may be the foundation, but employees are the lifeblood that makes the process work. Obtaining quality talent in manufacturing is extremely challenging. According to score.com, 89% of manufacturers cannot fill job openings due to shifting skill sets due to advanced technologies, misperceptions of manufacturing jobs, and retirement of baby boomers. Financing may be needed to support the Employment aspects of a Manufacturing business. The hiring of new employees for signing bonuses and training as well as perhaps hiring employment agencies in which costs can be quite high will all have to become the norm as hiring and maintaining employees is or will become a priority.

Making Payroll

Payroll can be an issue for manufacturers because of the inconsistency of clients paying invoices in a timely fashion, hiring of new employees that need to be trained on the manufacturing floor slowing production, the acquisition of bulk supply to get a discount, and other operating or growth issues that may arise all will play as factors in operating cash flow of a Manufacturer.Get Quote Now!

Types of Manufacturing Companies We Serve:

    • Fabricated Metal Manufacturing
    • Textiles and Apparel Manufacturing
    • Wood and Paper Manufacturing
    • Petroleum Manufacturing
    • Chemicals Manufacturing
    • Furniture Manufacturing
    • Plastics Manufacturing
    • Consumer Products Manufacturing
    • Firearms, Parts and Accessories Manufacturing

Why AdvancePoint Capital?

  • Experience- with Manufacturing Industry. We have been funding manufacturing businesses for years.
  • Trust-Excellent reviews and feedback from Manufacturing Companies 
  • Loan Specialists –Experiences Business funding specialists who know the manufacturing industry.
  • No cost, no commitment quotes
  • Products – A Variety of Manufacturing Business Loan Products. We don’t just offer what we have; we offer what’s available in the marketplace.

Start to Grow Your Manufacturing Business Now!

The fast, convenient and straightforward way to get the money you need for your business – now! Get Your Quote Today by filling out our simple form.

* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.