As a manufacturing business owner, you know that Murphy’s Law often applies — “What can go wrong will go wrong.” Unforeseen expenses can quickly deplete your cash reserves and make it difficult to meet production goals. Finding the right financing solution may help you stay liquid and continue growing your manufacturing business. That’s why it’s essential to research all your options for manufacturing loans and choose the lending terms that will suit your needs best.
The definition of manufacturing is, “the making of articles on a large scale using machinery.” This could be anything from flour to bake your signature chocolate chip cookies, to high-tensile steel to manufacture helicopter blades. Regardless of what you manufacture, your company is likely to need plenty of machinery and supplies to keep your production lines running smoothly. Manufacturing business loans can be used to purchase new equipment or to finance the maintenance of existing machines.
Another common use of manufacturing loans is to finance a new or expanded facility. Whether you’re a small operation that’s ready to expand, or a larger manufacturer that’s growing rapidly, you’ll need sufficient space for growth and enough employees to meet demand. Using a business loan to buy a new facility can save you the cost of leasing or buying out an existing property.
Depending on the type of loan you select, you may be required to provide various documentation and undergo a credit check as part of the approval process. This can include your company’s balance sheet, profit and loss statement, tax returns, bank statements, and a business plan. Most lenders will want to ensure that you’ll be able to afford the monthly payments on your loan. This can be done by calculating your debt service coverage ratio (DSCR).
Online lenders and lending marketplaces are becoming more popular with manufacturers. They’re often more flexible in their loan requirements and can offer competitive terms that traditional banks can’t match. They can also be less formal and provide an easy way to apply for funding from the comfort of your office.
Become is the fastest, most intuitive way to find funding for your manufacturing business. Our secure, fast application process is designed to give you the money you need in as little as three hours. Get started today with a free prequalification without impacting your credit score. Then, once you’re approved, you can access funds within 24 hours and grow your business. The sooner you start, the sooner you can begin turning your ideas into reality.