Manufacturing Loans: Best Options to Consider in 2023
To succeed in the trillion-dollar manufacturing industry, you’ll need significant capital. Through manufacturing loans from reputable lenders, you can secure financing that can help you establish a site and acquire new assets.
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Manufacturing businesses must manage their supply chain and inventory in the most efficient way possible to save time and money. To do so, manufacturing companies need to invest in state-of-the-art equipment and top-quality materials.
Also, you may face cash flow issues, if you allow your customers to extend their payment terms. That can make it difficult for you to run and grow your business. In addition, since manufacturing is a highly competitive, ever-evolving industry, you’ll need ample cash to pay for skilled talent that can take your products to new heights.
There is no shortage of small business loans for manufacturing companies on the market. Since each option has its own pros and cons, it’s important to compare them before you move forward with any product.
In this review, our experts highlight each the rates, fees and terms of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.
Best Manufacturing Loans for 2023 - Full Overview
American Express Business Blueprint™ - Best for Fair Monthly Revenue
Monthly fee: 3-9% for 6 month loans, 6-18% for 12-month loans, 9-27% for 18-month loans
Loan amounts ranging from $2,000 to $250,000
No prepayment penalties and no origination fees
Convenient application process
Pros & Cons
Straightforword application process
Fair monthly revenue requirements
No collateral required
Complicated fee structure
Potentially higher interest payments
American Express Business Blueprint™ program hosts the American Express® Business Line of Credit product. The lender offers a business line of credit between $2,000 and $250,000 with 6-, 12-, or 18-month terms. In addition to a convenient application time, American Express Blueprint offers flexibility. After approval, borrowers can access a set funding limit in draws. You’ll only pay fees for what you borrow, but keep in mind that American Express Business Line of Credit comes with a slightly complicated fee structure: 6-month loans: 3-9%, 12-month term: 6-18%, 18-month term: 9-27%.
Main Features American Express Business Line of Credit stands out for its straightforward application process and reasonable qualification requirements. You will need to earn at least $3,000 in the average monthly revenue, have a credit score of 640 or above, and be in business for 12 months in order to qualify. However, all businesses are unique and are subject to approval and review. Note that interest payments can add up, but you will only pay interest on active draws.
Manufacturing is a cyclical industry. If you need help meeting business expenses during a down cycle, American Express Business Line of Credit may help. Just keep the fee structure in mind.
National Funding - Best For Manufacturing Equipment Loans
Great reviews and rankings on Better Business Bureau (BBB) and TrustPilot
No down payment required
High annual revenue requirement
No mobile app
National Funding equipment loans can help you pay for the new or used equipment you need to run your manufacturing business. You may lock in up to $150,000 and put it towards tanks, mixers, centrifuges, compressors, shedders, and more.
Main Features National Funding’s equipment loans cap out at $150,000 with repayment terms between two and five years. You’ll pay back your loan every month. To qualify for an equipment loan, you’ll need a credit score of at least 600, at least 6 months of business history and $250,000 or more in annual revenue.
If your manufacturing business earns a healthy revenue stream and could use some cash to pay for working capital, National Funding might be a good choice. You won’t need to save for a down payment or wait long for funding.
Excellent customer reviews on independent review sites
Pros & Cons
Poor credit accepted: Minimum score is 500 for a working capital loan
Multiple loans and products to choose from: Lendzi is a direct lender and a partner with more than 75 other lenders
Fast funding times: Funds deposited within 24 hours on approved loans
Excellent customer ratings: Thousands of 5-star reviews from past customers
High annual income requirement: Lendzi recommends $180,000 or more
Rates may be high: If your credit is poor, expect to receive a higher rate on your loan
Lendzi is on a mission to get high revenue small businesses the funding they need, regardless of credit or if they’ve been turned down by lenders previously. Lendzi was founded in 2020 and is an excellent lender to work with. They currently have more than 2,000 5-star reviews on sites like Google, TrustPilot, and Better Business Bureau. The application takes just a few minutes to fill out and does not impact your credit score.
Main Features Lendzi working capital loan requires a minimum credit score of 500, and you could borrow up to $400,000. Terms range between three and 15 months, and factor rates start at 1.15. To qualify, you need to be in business for at least six months and have $180,000 or more in annual revenue. Once you submit your application, a representative from Lendzi will contact you. This will give you a chance to discuss your business, your goals, and your borrowing needs. The representative will walk you through the process and help you decide which loan is the best fit for you.
Lendzi wants to help your manufacturing business succeed, even if you have bad credit. The lender values second chances and knows that poor credit shouldn’t stand in your way of getting a loan.
Bluevine is an online lender with business lines of credit of up to $250,000. If you’re unsure of exactly how much capital you need or would like to cover working capital costs on a short-term basis, a Bluevine business line of credit is worth exploring.
Main Features Bluevine’s lines of credit range from $5,000 to $250,000. You can choose terms of 6 or 12 months and land an APR as low as 4.8%. These loans are unsecured so you won’t have to put up any collateral to take one out. Once you move forward with a Bluevine line of credit, you’ll repay the money you borrow plus interest on a weekly or monthly basis. Bluevine will look for a credit score of at least 625, 6 months or more in business, and at least $10,000 a month in revenue.
For flexibility, a Bluevine line of credit might be the solution. You’ll be able to borrow as much or as little as you want to fund your manufacturing business, up to a set credit limit.
Since 2008, Fora Financial has offered short-term loans of up to $500,000 with quick funding in up to 72 hours. If you’re facing cash flow shortages in your manufacturing business, these loans can come to the rescue, even if you don’t have the best credit.
Main Features To secure a Fora short-term loan for your manufacturing business, you’ll need a credit score of at least 500, $12,000 minimum in earnings, and 6 months of business under your belt. Loan amounts range from $5,000 to $750,000 with terms between four and 15 months.
If you can’t wait long for funding and have the ability to repay your loan in four to 15 months, Fora Financial is a smart choice. You may get approved for up to $750,000 in capital to help you start or grow your venture.
Loan features: Loan features refer to loan terms, loan amounts, and repayment plans. Some lenders pride themselves on lengthy repayment terms, large loan amounts, and flexible repayment plans, which are ideal if you’re in manufacturing. Others are known for shorter terms, smaller loan amounts, and repayment plans with fewer options.
Application process: Many lenders offer online applications you can complete quickly, within minutes. You might even be able to prequalify and check offers before you formally apply, without any impact on your credit score.
Interest rates and fees: Interest rates and fees like origination fees and late fees can vary significantly from lender to lender. Some lenders offer minimal to no fees and lower the cost of borrowing for you as a manufacturing business owner.
Qualification process: Most lenders will require you to meet certain minimum credit score, annual revenue, and business history requirements. Some are more lenient and cater to new manufacturing business owners.
Customer support: Customer support can be in the form of live chat, emails, or phoneconversations. It may also involve a robust FAQ section or self-serve help page on the lenders’ websites.
Online user reviews: All lenders say their loans are great. However, unbiased reviews and ratings on third-party review sites like Trustpilot and Better Business Bureau (BBB) reveal a lender’s true reputation and value.
Perks and bonuses: While perks like credit score monitoring and hardship assistance are attractive, especially to borrowers in the challenging manufacturing industry, they’re only offered by select lenders.
Main Features of The Best Manufacturing Loans
Min. Credit Score
Min. Time in Business
Up to $400,000
Factor rates starting at 1.15
Factor 1.1 - 1.9
American Express Business Line of Credit
Average monthly revenue: at least $3,000
Ranging from $2,000 to $250,000
Varies (see above)
$5,000 to $250,000
Starts at 4.8%
What Are the Costs of Running a Manufacturing Business?
If your business manufactures a product or line of products, you can expect these costs.
Raw materials: Also known as direct materials, raw materials are anything you buy from other companies so that you can produce your own products.
Direct labor: Direct labor refers to the employees you hire who work directly on your production line. They might operate equipment and transport raw materials and finished products in and around the plant and warehouse.
Fixed overhead: These costs don’t increase or decrease as the number of products you produce goes up or down. Property taxes and employee salaries are a few examples.
Variable overhead: Variable overhead costs fluctuate as your activity increases or decreases. Utilities to run the plant, raw materials, and shipping and handling fees all fall into this category.
How Can Manufacturing Companies Use Business Loans?
The most common purposes for manufacturing loans include:
Commercial property: You may want to invest in a plant or warehouse so that your employees can comfortably manufacture enough products to meet the demand. If you have a current property, you can also secure financing to renovate or expand it.
Equipment: You’ll need equipment to run your plant and produce your products. You can use a loan to fund new or used manufacturing equipment such as drilling machines, lathes, gear shapes, and milling machines.
Working capital: Since the manufacturing industry is prone to cash flow shortages, a manufacturing loan is a great way to cover working capital needs like payroll, materials, and insurance.
Marketing: Marketing can help you land new customers and retain current ones. With manufacturing financing, you’ll be able to pay for a new website, brochures, online ads, and other marketing initiatives.
Employees: If you own a manufacturing business, you know that your employees are your greatest assets. You can use a manufacturing loan to recruit and train an experienced, talented team of workers.
Emergencies: In a perfect world, you’d be able to plan for every expense your business incurs. Since this isn’t the case and emergencies are bound to pop up, manufacturing financing can give you some peace of mind.
Types of Loans For Manufacturing Businesses
In addition to the business loans we discussed above, consider these options for your manufacturing business.
SBA Loans: Partially guaranteed by the U.S. Small Business Administration, SBA loans offer low interest rates and longer repayment terms. There are several SBA loan programs you can choose from such as 7(a) loans, and 504 loans. In most cases, you need strong credit and sufficient revenue to get approved.
Equipment financing: Equipment financing is just what it sounds like: financing for manufacturers that’s specifically designed to pay for new or used equipment. These loans are backed by the equipment itself so they’re easier to qualify than other products.
Invoice factoring:Invoice factoring is when you sell your invoices for immediate cash. Typically, a factoring company will invoice you 85% to 90% of your unpaid invoices.Once they collect payment from your customers, you’ll receive the remaining balance minus the factoring fee.
Merchant cash advance (MCA): An MCA offers funds in exchange for a percentage of your debit and credit card transactions. You’ll receive payments daily as your manufacturing business gets paid. The total amount you’ll repay will be based on the factor rate.
How to Qualify for a Manufacturing Business Loan?
To position yourself as an attractive borrower and increase your chances of getting approved for a manufacturing business loan, follow these tips.
Finalize your business plan: Most lenders will ask you for your business plan so they can learn more about your manufacturing business and what you intend to do with the loan proceeds. Make sure your business plan is in tip-top shape before you apply for loans.
Improve your credit: The higher your credit score is, the more likely you are to land manufacturing loan offers with competitive rates and favorable terms. Do your best to improve your credit by making timely payments, keeping debts low, and increasing your credit limits.
Check your online presence: It’s common for lenders to do their due diligence when they review your application. Take a closer look at your company’s presence on social media and review sites. Respond to negative reviews and remove any content that doesn’t position you in the best possible light.
Do your homework: While it may be tempting to apply for the first manufacturing loan you find, doing so can lead to a denial or sky-high interest rates and fees. Shop around, compare lenders, and only apply to loans with requirements you meet.
How to Apply for Manufacturing Business Loans
Here’s what you need to do to apply for manufacturing business financing.
Shop around: Explore various lenders and loans so you can find the ideal options for your unique business goals.
Gather your documents: Make sure you have certain documents and information like financial statements, a business plan, your tax ID number, and bank statements on hand.
Fill out the application: Most lenders will allow you to apply for a manufacturing loan online and upload your documents electronically. Double check your work before you hit submit to avoid delays in the approval and funding process.
The manufacturing industry is essential to the U.S. economy. With the help of manufacturing business loans, you can succeed in it and stand out among larger companies. Just make sure you have a solid business plan in place and experienced, hard-working personnel to help your venture run smoothly and grow.
Frequently Asked Questions(FAQ)
What is a manufacturer loan?
A manufacturing loan is a loan you use to cover expenses related to your manufacturing business. It can be a short-term loan, long-term loan, line of credit, equipment loan, SBA loan, invoice factoring, or merchant cash advance. Many lenders offer these products, including Fora Financial, Lendio, American Express Business Line of Credit, Bluevine, and Credibly.
How can I finance an increase in manufacturing orders?
Since the cash flow cycle for manufacturing businesses tends
to be lengthy, invoice factoring can be a great way to reduce the amount of
time it takes for you to get paid. It involves a third-party factoring company
that purchases your invoices at a discount and pays you 85% to 90% of their
value. You’ll receive the remaining balance once they collect customer payments
on your behalf.
How can I finance a manufacturing business expansion?
There are several ways you can finance a manufacturing
business expansion. If you have good credit, an SBA loan is your best bet.
Another option is a traditional term loan where you’ll receive a lump sum of
money and repay it over time via fixed monthly payments. In addition, a line of
credit can come in handy if you’re unsure of exactly how much money you’ll need
to meet your expansion goals.
How can I finance new manufacturing equipment?
An equipment loan is the best way to finance new
manufacturing equipment. Upon approval, you may be able to cover 100% of its
cost. Since the loan will be secured by your equipment, it will be fairly easy
to qualify. The caveat, however, is if you default on your payments, the lender
has the right to seize your equipment.
How do I get a manufacturing loan?
To get a manufacturing loan, check your credit so you know
what types of offers you may be eligible for. Then, shop around and compare
your options. Once you find a loan that meets your needs, gather the
appropriate documentation and apply in-person or online through the lender’s