Manufacturing Loans & Financing Options for Your Business

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A lot has changed in the manufacturing industry over the years. However, one thing has remained constant, and that’s the need for operating capital. As a small business owner, you understand this better than most. Your business needs money to keep the doors open, pay employees, restock inventory, pay utilities, and much more. You may be an industry veteran who is looking for extra capital to help you expand your company. Or, you might be just starting out and need to raise money to open your first store. Whatever the case is, you have financing options that can help you meet your needs. If you need help securing a manageable loan for your business, we encourage you to reach out to us. To date, our Seek Capital experts have helped secure more than $400 million across over 16,300 all-time approvals. We would love to add you to that number. With 400 approvals just this month, you can trust that we work hard to help you get the best loan for your needs. Let’s shift our focus to how you can set up your manufacturing business for success. When you get the funding you need, you can use it in a variety of ways for the betterment of your company.

How to Successfully Finance Your Business

As a manufacturer, you have some benefits on your side that let you use your funds with minimal restrictions. Regardless of the industry that you’re in or what you make, you need equipment to run your business.

Upgrade Equipment

Outside of your labor, your equipment is the backbone of your company. Without it, you can’t produce your products and advance your business. Keeping your equipment operating at peak performance is necessary to ensure that production experiences as little downtime as possible. The best way to avoid malfunctioning or broken equipment is to upgrade it. If you’re currently running old equipment, you’re at risk of experiencing problems. Potential risks aside, new equipment is likely to increase your production numbers, allowing you to pump out more product on the hour. This could give you the edge to excel in your industry. As a manufacturer, some equipment that you might need to consider includes:

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

Buy Materials

There is a long list of materials that manufacturers need for their businesses. These can include anything from chemicals to textiles. Raw materials typically require bulk purchases due to their high cost. In some cases, the cost of materials can be more than you can reasonably afford. To ensure that you can get the materials your business needs to succeed, look for manufacturing loans that allow you to fund a large purchase order. When you receive your funding, use it to stock up on the supplies you need so that your company isn’t at risk of falling behind.

Expand Operations

If you find yourself in a position where you need more space, it’s time to start thinking about expanding your business. If you’re like many business owners, however, you don’t have this kind of money just laying around. Or if you do, you can’t afford to tie it up. Expanding is a costly endeavor that requires both time and money. Fortunately, a manufacturing business loan can help you fund your expansion while leaving you money for other areas of your business.

Loans and Financing Options

When it comes to working with heavy machinery and equipment, you’re almost always guaranteed to experience problems. It’s just the nature of machinery. Nothing is foolproof, and plenty of equipment is happy to prove this to you. When equipment breaks down, you’re left scrambling to repair it and get it working for you again. Elsewise, your business will suffer, you will lose money, and you’ll be behind on production. If you are in a position where you need working capital or new equipment, it is crucial that you find a loan with terms and rates you are comfortable with. Doing so will help you achieve your goals without feeling pressure to come with more money than you can afford. To help you with this, let’s look at some of your best choices for covering expensive equipment costs in your manufacturing business.

Equipment Financing

By financing your equipment needs, you don’t have to worry about depleting a significant portion of your working capital. What’s more, you can get the equipment you need so that your business operations don’t suffer. When you finance your equipment, whether machinery, tools, or vehicles, whatever it is that you finance will serve as collateral. In turn, less is directly required from you and your business. Moreover, lenders are more likely to fund the full amount of manufacturing equipment, ensuring that there is far less burden on you. As far as how long you have to repay equipment financing loans, they usually come with repayment terms of one to five years – often the lifespan for such equipment.

SBA Loan

If you’re trying to get a government loan for manufacturing needs, you should consider loans that are backed by the SBA ( Small Business Administration ). These loan amounts can go up to $5 million, with repayment terms between five and 25 years. The Small Business Administration doesn’t give out loans directly. Instead, this government agency partners with lending agencies across the country to find a loan for you. What’s more, the SBA personally guarantees the financing that is given to borrowers. In some instances, the SBA will guarantee as much as 85% of the funding you borrow. Because of this, lenders are more likely to consider SBA loans. By guaranteeing such a large amount of your loan, lenders are less likely to incur risks. Even better for manufacturers, SBA loans have some of the best interest rates available, making them an appealing choice for businesses.

Term Loan

When you’re approved for a term loan, you can look forward to getting your money all at once. What’s more, you can then use these funds for just about any business purpose you need. The repayment period for these manufacturing business loans can vary between months and years. Your term depends on the amount of the loan and the lender. So there are some business term loans that might come with a repayment term of five years, whereas long-term loans can extend to 10 years and beyond. Contrast this with some shorter term loans that you can repay in a matter of just a few months.

Line of Credit

A business line of credit is a versatile financial solution that’s ideal when you’re in need of manufacturing business funding. Instead of receiving a singular lump-sum payment, your lender gives you a maximum credit line with a repayment term. Think of this as a credit card. You don’t necessarily have to use the funds made available to you, but they are there if you need them. More importantly, you are only responsible for paying interest on the funds that you do use. It gets better. As soon as you pay back the amount that you borrowed, your line of credit reverts back to its original amount. This way, you don’t have to worry about running out of funding for your various projects and needs.

Accounts Receivable Financing

You can leverage your business’s invoices with accounts receivable financing. This financing option serves to get you cash flow quickly so you can address your most pressing matters. Accounts receivable financing is a good option when you’re in-between client payments and need cash right away. With this option, lenders advance you money based on a percentage of your invoices. The percentage depends on the lender but typically ranges between 70 and 90%. To use this service, you’ll have to pay a weekly fee to the lender, which is deducted from your advance until you’ve paid it back in full. At which time, the lender will give you back the remaining percentage and keep the fees you’ve incurred for themselves.

Merchant Cash Advance

If your credit isn’t the greatest, but you need cash fast, a merchant cash advance could be just what you need. It’s a short-term solution that sees your lender give you a singular sum that’s based on your company’s future sales. Funding and interest fees are included, and you’ll likely have to make repayments daily. As such, you’ll want to try to pay back this advance as soon as possible to avoid incurring costly charges.


You have a lot of loan and financing options for your manufacturing business to consider. We invite you to get in touch with us if you need assistance making the right decision for your needs. You can also find guidance via our articles section . From growing your business to securing loans and much more, we have a wealth of information and helpful tips awaiting your discovery. Sources

Did You Know?
We've funded over $400 million for small business owners since 2015