If you’re the owner of a manufacturing business, you understand just how important your work is to numerous sectors. In fact, by some estimates, the transformation of raw materials into finished products contributes over $2 trillion to the American economy! However, it can be tough to always have the working capital on hand to cover your business expenses yourself. Without steady cash flow, growth and even just regular maintenance could become impossible. Thankfully, whether you need cash for equipment, payroll, real estate, expansion or something else, you can get a loan tailored to your situation. Take a look.
Traditional Bank Loans Offer Low Risk
One of the most traditional types of loans is the bank loan, which are generally lower-risk than other types of loans and offer good terms and rates. Bank financing options can include commercial real estate loans, term loans and lines of credit. However, if you’re interested in a bank loan, be sure you have a good history of handling credit, since banks usually only take on low-risk companies. Check your company’s cash flow, collateral and debt repayment history before applying.
SBA Loans Are Backed by the Government
Small Business Administration, or SBA, loans are given out by SBA lenders but backed by the government, which means if you default, you’ll have a bit of a safety net as the government will cover part of the losses. This arrangement recognizes how important capital is to running a company and supports small businesses.
Equipment Financing Lets You Access New Technology
If you need a loan to purchase updated equipment, you’ll be happy to know that you can get your equipment financed without having to take out a larger, unrelated loan! By financing new equipment, you can access the latest technology and keep your company competitive and cutting-edge quicker than you might be able to by waiting to pay up front.
Invoice Financing Is a Good Short-Term Solution
If you’ve sent your clients their invoices but they’re taking 30 to 90 days to pay, you may still need that money to keep your operations running smoothly in the meantime. This is where invoice financing comes in – you can sell your unpaid invoices to a factor and they’ll advance you up to 90% or more of the invoice amounts!
Manufacturing is an important sector that supports other industries and is essential to the U.S. economy. Running a business in the industry, though, can sometimes require cash flow that you don’t always have on hand. With these facts under your belt, you can feel confident that you’ll secure the right loan to support your manufacturing business.