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Loans for Manufacturing Businesses: Planning for Long-Term Success

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If you’ are an entrepreneur seeking financing to grow a manufacturing business, you’re in the right place. There are several financing sources that offer loans for manufacturing businesses, but alternative lenders might provide better terms to fit your needs.

 

How can you use financing for manufacturing?

Manufacturing financing and business loans can be used to or expand  operations acquire of resources like , essential equipment to skilled personnel and more. 

These financial options cover various operational costs, providing the necessary capital for seamless daily functions and growth opportunities. In an environment where innovation is paramount, such funding can help you gain supports unique business requirements, offering a competitive edge.

 

Manufacturing financing and loans are most often needed for:

  • Real estate: You need plenty of square footage to hold your manufacturing equipment, machinery and supplies.
  • Qualified workers: You need to produce quality product and that requires a dedicated, experienced group of employees and new hires.
  • Machinery and equipment: Depending on your product, purchasing the necessary machinery to meet production quotas can be one of the most expensive investments you may make in this business.
  • Cash flow: Day to day operations require extra capital to keep everything running smoothly and on schedule.

While many government agencies offer manufacturing businesses dedicated support through an extensive network of programs and services. However, many of these programs require a lot of documentation and can take a long time to get approved.

On the flip-side, alternative lenders  offer greater ease, flexibility and terms that will meet your needs today as well as support you as your business grows. They can be key to accessing the cash you need quickly to expand your business.

 

Types of loans for manufacturing businesses

There are a few different loan products for manufacturers available and lenders in which to pursue them, each with their own approval criteria, benefits and drawbacks:

  • The Small Business Administration (SBA) is, a government agency that connects you to a partner financial institution for the loan and also backs a portion of the loan.
  • Alternative lenders, offer custom loan options and flexible repayment schedules along with a user-friendly application process.
  • Traditional banks, offer small business loans to companies with a strong credit history and a proven track record.

Small Business Administration loans

The SBA is a government agency that offers several loan products to assist the manufacturing industry. The SBA itself does not lend the money, but connects you to a lending partner (usually banks or Certified Development Companies (CDC), and then guarantees a portion of the loan. 

The SBA offers a specific loan for manufacturing businesses that need start-up financing, basically to acquire fixed assets like equipment or real estate. According to sba.gov, they are typically long term, fixed rate loans.

The pros:

  • SBA loans help business owners who those normally may be unable to secure financing on their own through the bank. They are often funded through private-sector lenders and are guaranteed by the SBA, so financial criteria can be easier to meet than if you just approached a conventional bank yourself.
  • If you Mmeet the SBA requirements, and you typically are granted a relatively low interest rate.

The cons:

  • As a government agency is guaranteeing part of your loan, the application process is very detailed and is heavy in documentation requirements.
  • Your credit, resume, business plan and even your skills and ability to manage your business are scrutinized in the decision process for the loan.
  • Government agencies do not move quickly. Approval can take as much as 90 days.

 

Commercial bank manufacturing loans

Loans from traditional banks may be a good option if you have a more established business with a strong credit history.

The pros:

  • If you can get loan approval, you will probably get a lower interest rate, depending on your credit score.
  • Approval this time means that the next time you need money, you may qualify with greater ease.

The cons:

  • Banks will often require An excellent credit score and credit history.
  • If you are trying to launch your manufacturing business, your application may be rejected by a bank. Most banks require a solid business history.
  • The application process is very detailed and requires you to provide all documentation of your financial records,  revenue claims and business plan.
  • You may have to risk valuable collateral in case you cannot repay the loan.

Alternative lenders for manufacturing financing

Alternative lending options can provide greater flexibility and ease than a conventional bank or the SBA.

The pros:

  • Alternative lenders often have less stringent requirements and a faster application process. Rates may be slightly higher than a bank, but you stand a greater chance of approval.
  • The application is simple, and easy to complete. Documentation is light and easy to provide.
  • Your business and what you are creating is more important than your past credit history, so an excellent credit score is not required for approval.

The cons:

  • Since the lender is accepting greater risk through less stringent credit requirements, the result is that the interest rate is typically a little higher than a bank.

 

How to get a loan for your manufacturing business with Credibly

Applying for a loan is easy. You can complete the online application form on the Credibly website. Our evaluation focuses on your current financial performance and the future prospects of your manufacturing business, rather than just past financial history. 

 

Choosing Credibly for your manufacturing business loans

Navigating the financial landscape while establishing or expanding a manufacturing business can be daunting. However, Credibly can help.

Unlike traditional lending avenues, Credibly acknowledges the uniqueness of each business, offering tailored financing solutions. Our application process is swift, and you can receive funding in as soon as than 24 hours.

Credibly also supports a vast array of industries, emphasizing their versatility and customer-centric approach. Our impressive Trustpilot rating underscores our their reliability and excellent customer service., coupled with a remarkable track record of over That’s how we’ve helped 30K+ business owners get over $2B in small business financing. Opt for Credibly, where your manufacturing aspirations are understood, and your business’s potential is the priority.

To learn more about all of your business funding solutions contact Credibly today!