Manufacturing Business Financing

Financing Solutions for Manufacturers

Manufacturing companies often require significant capital to purchase raw materials, maintain inventory, acquire equipment, pay employees, and fulfill customer orders.

As production and sales grow, the amount of capital tied up in inventory and accounts receivable can increase substantially.

Lirodean helps manufacturers explore working capital and financing solutions through banks, asset-based lenders, equipment finance providers, and alternative lenders.

Financing Options for Manufacturing Companies

Depending on the company’s financial profile, potential financing solutions may include:

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Business Lines of Credit

Revolving credit facilities can provide flexible working capital for payroll, suppliers, raw materials, inventory, and other operating expenses.

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Asset-Based Lending

Manufacturers with significant accounts receivable, inventory, machinery, or equipment may be candidates for asset-based financing.

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Accounts Receivable Financing

Eligible B2B receivables may be used to support additional working capital.

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Inventory Financing

Certain lenders may provide credit supported in part by eligible inventory.

Inventory eligibility and advance rates depend on factors such as type, turnover, marketability, location, and liquidation value.

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Equipment Financing

Manufacturing equipment, machinery, and technology may be financed separately, helping preserve working capital for operations.

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Purchase Order Financing

Manufacturers with qualifying customer orders may have financing options for certain costs associated with fulfilling those orders.

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Why Do Growing Manufacturers Need More Working Capital?

Growth frequently requires manufacturers to spend money before generating cash from additional sales.

A company may need to purchase raw materials, increase production, hire employees, build inventory, and ship finished products before receiving customer payment.

This creates a working capital cycle that can become more demanding as revenue increases.

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Can Accounts Receivable and Inventory Be Used as Collateral?

Potentially.

Asset-based lenders may provide financing against eligible accounts receivable and inventory.

The lender typically establishes a borrowing base using agreed eligibility criteria and advance rates.

Machinery and equipment may also support certain financing structures.

Financing New Equipment Without Using Working Capital

Purchasing manufacturing equipment entirely with cash can reduce liquidity available for other operating needs.

Equipment financing can spread the cost of machinery over time and help preserve cash for inventory, payroll, suppliers, and growth.

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What Do Lenders Evaluate?

Lenders may review:

• Annual revenue

• Profitability and cash flow

• Accounts receivable aging

• Customer concentration

• Inventory

• Equipment and machinery

• Existing debt

• Historical financial statements

• Interim financial statements

• Industry and end markets

• Financing purpose

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Finance Your Manufacturing Growth

Whether your company needs additional working capital, a larger credit facility, equipment financing, or asset-based lending, Lirodean can help evaluate potential financing solutions.