Types of Manufacturing Loans

Manufacturing is a broad industry that can encompass everything from producing flour for cookies to high tensile steel used in helicopter blades. Regardless of the specifics, one thing remains constant — manufacturing companies need capital to operate. From buying raw materials to meet demand, to upgrading equipment and hiring more staff to keep up with increased orders, there are many reasons why a manufacturer would need additional financing. And fortunately, there are plenty of loan products that can help.

There are several types of business loans that can be useful for manufacturers, including lines of credit, invoice factoring, commercial mortgages, small business administration (SBA) loans, and merchant cash advances. These options can be found through banks, credit unions, alternative lenders, and online lending marketplaces. Depending on your situation, you may need to compare rates and terms across lenders to find the best option for your manufacturing company.

Term Equipment Loans

Purchasing new equipment is a common need for manufacturing businesses. Whether you are expanding your plant or adding a line of new product, investing in equipment will help you grow and remain competitive. This type of loan can be a good option because it offers fixed monthly payments over the loan term. And as you pay off the loan, you build equity in the equipment, which can then be used to secure future manufacturing financing. Term equipment loans can be secured through your bank, local credit union, private lenders, or a lending marketplace.

Invoice Factoring

As a manufacturer, you often need to wait weeks or even months to get paid for the products you produce. In the meantime, you need to cover expenses such as payroll and materials. Invoice factoring is a form of financing that allows you to sell your accounts receivable to a third-party company, which will then take on the responsibility of collecting and disbursing funds to your business. This can be a great option for manufacturing businesses that need to manage cash flow gaps caused by long payment cycles or delayed deposits.

Merchant Cash Advance

Unlike traditional loans that require lengthy application processes, you can typically apply for a merchant cash advance through an online lender or lending marketplace. Once approved, you can have the funds deposited to your account within 24 hours. You can repay the funding amount by allowing a set percentage to be automatically deducted from your business’s daily or weekly debit and credit card sales.

Getting the right business loan for your manufacturing business can make all the difference. With a steady stream of working capital, you can focus on growing your business, stay ahead of the competition, and ensure that all your clients receive the quality products they deserve. So if you’re ready to boost your manufacturing business with the right financing solution, contact us at Credibly today. We’ll work with you one-on-one to match you with the program that will help you reach your goals. manufacturing loans

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