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Complete Guide to Manufacturing Loans for Your Business

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Loan Overview

Loan Amount Up to $500,000
Estimated Repayment Terms 1-5 Years
Interest Rate Starting at 7%
Speed of Funding As fast as 1 day

The manufacturing industry has evolved through the years, but one thing hasn’t changed—companies need capital to operate. And your business is no exception. Whether you’re a small operation looking to take advantage of a new business opportunity or a large company seeking working capital to fund day-to-day expenses, there are manufacturing finance options that can help. Let’s look at some instances when manufacturing loan programs can be useful as well as a few examples of financing you can leverage.

Financing Your Manufacturing Business for Success

Good news: Many types of financing don’t have restrictions on how you can use your funds. Here are a few reasons you might consider applying for a manufacturing loan, whether you’re in the steel, plastics, clothing, transportation or another manufacturing industry.

Upgrade Equipment

Has your production line seen better days? Will investing in the latest technological innovations advance your business? If you’re looking to modernize your tools for advancement, or you have a dire need to replace a broken piece of machinery, use funds to update your equipment, including:

  • Heat-press machines
  • Industrial printers
  • Laser-cutting machinery
  • Molding machines
  • Packaging equipment
  • Robotics
  • Welding equipment

Purchase Materials

Chemicals, textiles, hardware, the list can go on. Raw materials can be costly and require bulk purchases, sometimes more than your budget can spare. Find manufacturing loans to fund a large purchase order and stock up on the supplies you need when you need them.

Expand Your Business

Perhaps opportunities are coming up and it’s the right time to invest in scaling your business, but you lack the capital to finance the cost on your own. If you don’t have all the funds you need, or don’t want to deplete your cash reserves, find manufacturing business loans to fund your expansion project.

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Best Financing and Loans for a Manufacturing Company

In manufacturing, Murphy’s Law often applies–what can go wrong will. Those unforeseen circumstances can put a hole in your finances, making it difficult to run your business. If you’re in need of new equipment or working capital in the manufacturing industry, find borrowing terms that will help you meet your goals.

Here are some of the top financing options and loans for manufacturing businesses in the U.S.:

Equipment Financing

Whether you’re looking to lease or purchase new machinery, vehicles or tools for your company, manufacturing equipment financing can help get the funds you need. With this option, the machinery you acquire serves as collateral for your financing. As such, in many cases, lenders will fund up to 100% of the value of the equipment you want to purchase. Repayment terms generally don’t extend beyond the equipment’s useful life–often ranging from 1 year to 5 years.

SBA Loan

If you’re seeking government loans for manufacturing, consider loans backed by the Small Business Administration (SBA). Loan amounts can extend up to $5 million with certain SBA loans, and repayment terms can extend from 5-25 years.

While the SBA doesn’t directly loan funds, the government agency partners with lending institutions throughout the country, guaranteeing the financing provided to borrowers—up to 85% in some instances. This reduces the risk a lender might otherwise incur. Also, these loans’ interest rates are some of the best out there, which entices many borrowers.

Term Loan

With a term loan, a lender releases the funds they’ve approved you for all at once. You can typically use the funds for any business purpose. Repayment terms for these manufacturing business loans vary from months to years, depending on the loan and lender. For example, some business term loans might have repayment terms of 5 years, with long-term loans sometimes extending 10+ years. In contrast, some short-term term loans can be repayable in just a few months.

Line of Credit

A line of credit is a flexible solution when you’re in the market for manufacturing business funding. Instead of a one-time infusion of funds, a lender approves you for a maximum credit line and repayment term.

Similar to a credit card, you’re not required to use any portion of those funds. But whenever the time comes and you do need a boost of cash, the money will be at your disposal. You’ll pay interest only on the funds you use.

The best part? As you pay back what you borrowed, your credit line is replenished up to your original approval amount.

Accounts Receivable Financing

Leverage your manufacturing company’s invoices with accounts receivable financing, also known as invoice financing. This type of financing is a quick way to get a cash flow injection while you’re waiting on your clients to make their payments.

With accounts receivable financing, lenders advance you a percentage of the value of your invoices, which can range from 70-90%, depending on the lender. They’ll hold back the remaining percentage and deduct a fee, often weekly, until you’ve satisfied your advance in full. After which, the lender will give you the hold-back funds, minus the fees you’ve incurred up to that point.

Merchant Cash Advance

If you need funds fast and your credit isn’t in the best shape, consider a merchant cash advance, designed as a short-term funding solution. With this manufacturing finance option, your merchant cash advance provider will give you one sum of capital as an advance on your business’s future sales.

You’ll likely be set up on a daily repayment schedule. Also, you’ll be responsible for funding fees as well as the interest you accumulate until your advance is repaid, with rates and fees commonly higher than other financing types.

Where to Find Manufacturing Loans and Financing

Conventional banks and credit unions might be on the top of your list when researching your manufacturing finance options. After all, they’re known for their competitive interest rates and terms. That said, requirements to qualify can be taxing, with many lenders requiring collateral to secure your loan as well as a significant number of financial documents, which can include tax returns, profit-and-loss statements, bank statements and a business plan. Processing and time to funding can also be lengthy.

A contrast to conventional lending institutions are alternative non-bank lenders. Many borrowers apply with alternative lenders because they want to cut through the paperwork and get approved quickly. Because alternative lenders often take on riskier loans, they’re known to offer shorter repayment terms and higher interest rates. More frequent repayment installments are also common.


What You Need to Apply for a Manufacturing Loan or Financing

As you research your manufacturing finance options, you’ll notice lenders can have different requirements. At Fast Capital 360, our aim is to provide funding to business owners who meet this criteria:

  • Time in Business 4 months
  • FICO Score 500 +
  • Annual Revenue $100,000

To get started, you’ll need to provide:

  • Basic details about your business and yourself
  • 4 most recent monthly bank statements

Apply with Fast Capital 360

We pride ourselves on a fast turnaround. Find a manufacturing loan that works for you and take advantage of these benefits:

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Because we partner with top lenders throughout the country, we’re able to bring you multiple financing offers.

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Our experienced advisors will walk you through the funding process and answer any questions you have.

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