Find the Right Type of Loan for Your Manufacturing Business

2018-11-13T04:55:19+00:00November 13th, 2018|Categories: Equipment Financing, Manufacturing, Working Capital Loans|

The manufacturing sector has been helping carry the U.S. economy and drive growth in 2018. While the near-term outlook for that trend to continue is strong, there is growing concern about 2019 and beyond, according to many economists.

An article from the Association of Equipment Manufacturers notes a number of warning signs suggest significant economic growth won’t continue into next year. Consumer spending appears unsustainable, underlying data suggests many Americans are living beyond their means, and other prevalent factors that could hinder growth in manufacturing and other sectors include:

  • Higher inflation
  • Rising borrowing costs
  • More stringent immigration policies, which could limit labor availability
  • The rising fear of trade protectionism due to recent tariff announcements
  • The uncertain future of NAFTA

One action that could trigger a mini-boom in the manufacturing sector would be the passage of an infrastructure bill, but it’s not known yet if that’s in the cards.

Why Alternative Financing?

Clear Skies Capital (CSC) is in the business of supporting the success of manufacturers by helping them overcome the challenges presented by traditional financing. The sad truth is that any number of reasons can make your manufacturing business a poor candidate for a loan from a bank or another traditional source — lack of consistent cash flow; insufficient collateral, credit, operating history, and management team; poor debt-to-income ratio; customer concentration; and economic concerns, among others.

This reality can constrain you if you wish to do any other the following things and don’t have the necessary cash on hand:

  • Expand or invest in your business. One of the best ways to solidify your place in the industry is to grow by expansion, which can include offering new services or products, adding more staff, moving to a new location, and more. All those options require an infusion of cash.
  • Buy your space instead of continuing to lease. As a tenant, you don’t have full control of your businesses’ future, given the potential whims of your landlord. Owning your space is an attractive alternative, but it comes at a price.
  • Make an equipment purchase or increase inventory. The old saying that you need to spend money to make money is true, and it’s particularly appropriate when it comes to ensuring you’re investing in the most up-to-date equipment. As for inventory, it can be prudent to ensure you’re able to quickly fulfill orders of any size by having plenty of inventory ready to ship.
  • Buy out a partner or acquire a competitor. Whether you have a partner who’d like to step away from the business, or you’d like to tempt him to do so, you need money to make that happen. Same for acquiring a competitor, a strategy that can greatly strengthen your business.
  • Cover payroll and other expenses. You can find yourself in a cash crunch when receivables fall behind payables, and banks are unlikely to look kindly upon your need to secure cash to get you through what hopefully is a short-term gap.
  • Refinance existing debt in combination with a new need to bolster working capital and save substantially. Your refinance is going to go a lot smoother when you can show you have plenty of working capital to support ongoing operations. It’s always a good idea to get rid of high-interest debt as well as have a nice “cushion” of cash to allow you to respond to immediate opportunities.

Why Choose CSC?

A loan from CSC can be the solution to moving forward because we offer the following advantages:

  • We understand you may need cash right away, so we offer 24-hour approvals, with funds delivered shortly thereafter.
  • Our application is just one page, so you can quickly and easily complete it — no drowning in paperwork.
  • Less than perfect credit. Having a less than stellar credit score doesn’t disqualify you. We require a 500 FICO score for working capital loans and merchant cash advances and a 600 for equipment financing.
  • No collateral. Working capital loans and merchant cash advances are unsecured, while for equipment financing, the equipment serves as the collateral.
  • No guidelines. You can use the funds from a working capital loan or merchant cash advance as you see fit — to pay taxes, add staff, make renovations, market your business, cover payroll in off-peak months, or do anything else that supports your growth.
  • Plenty of options. Choose a working capital loan, equipment financing or line of credit — whatever will work best for your specific situation.

We want to see your business grow, and are ready to serve as your advocate to get you the funding you need. In addition to the reasons noted above, many clients work with us because:

  • We offer $5,000 to $1 million working capital loans and lines of credit up to $100,000.
  • Only $12,000+ in monthly deposits is required.
  • Loan interest is tax deductible.
  • Our customer service is excellent.

The Takeaway

Unlike traditional lenders, we want to say “yes” to your business plans. We’ve worked with many manufacturers, so we’re ready to lend our expertise to your decision-making process and work together toward your success. Discover how much you qualify for by scheduling a free consultation today right here.