Quick answer
Manufacturing business loans fund machinery, raw materials, wages and the long gap between starting production and getting paid. Manufacturers often own valuable equipment and sometimes property, which supports equipment finance and property-secured loans. Invoice finance releases cash from customers on trade terms, and working capital loans cover large orders.
Key points
- Equipment finance suits machinery, often with the machine as security
- Invoice finance releases cash from trade customers
- Large orders need working capital before payment
- Property security supports factory upgrades and tax arrears
Capital-heavy and cash-hungry
Manufacturers tie up cash at every stage. Machines cost hundreds of thousands. Raw materials are bought in bulk. Wages are paid while products move through the factory. Customers then pay on 30, 60 or 90 day terms. A large new order can be a cash flow problem before it becomes a profit.
Typical funding needs
| Need | Typical option |
|---|---|
| New or used machinery | Equipment finance |
| Raw materials for a big order | Working capital loan or trade finance |
| Cash tied up in receivables | Invoice finance |
| Factory fit-out or upgrade | Unsecured or property-secured loan |
| Tax arrears from a growth year | Tax debt loan |
What lenders look for
- Order book: contracts and repeat customers.
- Equipment register: what you own, its age and any finance on it.
- Margins: whether pricing covers materials, labour and overheads.
- Customer payment habits: how quickly invoices are paid.
- Bank statements: deposits, supplier payments and wages.
Questions to ask before you buy a machine
Will it allow new work, faster production or lower labour costs? How long until it pays for itself? Is it better new or used, bought or leased? What happens to production if it breaks down? Clear answers make a far stronger application, and help you avoid buying capacity you will not use.
An illustrative example
A Geelong metal fabrication business won a contract to supply brackets to a national builder. It needed a second laser cutter and steel for the first run. Equipment finance funded the machine, and a short-term loan covered the steel, repaid as the builder’s invoices were paid.
Bigger investments
For major upgrades or where credit history is complicated, property-secured loans starting at $20,000 and reaching $5,000,000 provide more room, and no valuation is required up front.
Mistakes we see in manufacturing funding
Buying capacity before the orders are secured, and pricing large contracts without allowing for material cost rises, are the two most common risks. Confirm the work the new machine will do and build price review clauses into long contracts.
Build your next order
Enquire in a minute and tell us what you make and what you need. Enquiries carry no credit check, a human reviews it, and nothing gets shared. Fund your production.
Frequently asked questions
Can I finance a used CNC machine or laser cutter?
Often, yes, depending on age, condition and resale market. Dealer invoices and service history help.
How do I fund a large order before the customer pays?
A short-term working capital loan or trade finance can fund materials and labour, repaid when the order is paid.
Will a lender fund a factory upgrade?
Yes, through equipment finance, unsecured loans or property-secured loans for larger projects.
Can manufacturers use invoice finance?
Yes, when selling to creditworthy business customers on terms.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a person who handles unusual deals calls you back.