Specializing In Small Business Loans For Metal Manufacturing
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Small Business Loan Options For Metal Manufacturing Companies
Metal manufacturing companies must consistently replace and repair equipment to stay competitive. The companies that can accomplish both tasks with the most speed and the most sensible costs have a distinct advantage. They can keep up with surges in demand and continuously take on new business.
Speed is particularly important in terms of testing, researching, and manufacturing products. When you have the resources to produce an increasing amount of options to choose from, there is a higher likelihood of customer satisfaction. In most cases, this comes down to having skilled, trained operators and the right equipment. Every metal manufacturing company either needs new equipment now or will need it soon. All machines have lifespans, which often turn out to be shorter than expected, following the release of more advanced models.
Sometimes, a new machine will be released that is capable of making new products. The cost will likely be significantly higher than previous models, even though the company’s revenue remains the same. Many companies solve this dilemma by leasing the machinery, costing them more money than buying.
US Capital has many years of experience facilitating Small Business Loans for Metal Manufacturing Companies. We have access to all types of business lending products. Contact us today for your FREE business funding consultation!
We have access to various business loan options for the construction industry that have proven to work for our clients. Take advantage today.
For most metal manufacturing companies, growth is not produced by a single, massive investment or jump in demand. It is a gradual process with many stages, almost like a giant to-do list. The business must consistently acquire new resources and implement new strategies to improve efficiency and stabilize cash flow. This doesn’t just happen overnight or even over the course of one season. These changes are made at an almost sporadic pace, occurring at different times of the year. Small businesses with this type of spending pattern are often recommended to choose a business line of credit as their additional funding option. With a business line of credit, you can cover your desired expenses when you need to and keep your customers satisfied, regardless of the hurdles that may be coming your way.
Here are four valuable uses for a business line of credit in the metal manufacturing industry:
1. New Equipment
Equipment tends to break or go out of date. You don’t have to be in the manufacturing business to understand that the latter scenario’s timeline is definitely a lot shorter these days. But manufacturers cannot afford to lose productivity or fall behind schedule because they don’t have the proper equipment to meet today’s standards for efficiency. You can avoid such misfortunes by investing in preventative maintenance or simply replacing the pieces of equipment vital for maintaining the quality of your products. Up-to-date equipment also decreases the risk of liability cases or other related lawsuits.
When you have an equipment financing option like a business line of credit at your disposal, you can replace equipment before it begins inhibiting productivity. You may have heard that equipment upgrades are eligible for state and federal tax rebates. This depends on the kind of upgrade, so you should speak to your accountant before assuming you’ll be able to write off your desired expense.
2. Improve Shipping Efficiency
If your company delivers products on a truck, you should certainly explore different shipping and handling options. Think back to how many times you’ve had something mailed to you in a box that was way too big. Well, had that company chosen a more appropriately-sized box, it would have been able to pack more boxes onto a truck and probably save a lot of money on gasoline. Odds are, your business does not package and deliver the same quantities of products as a popular online retailer. But there are plenty of investments you can make to save on shipping and handling costs. You could purchase a new truck that is larger or better on gas or buy cheaper packing materials. Even small changes to your shipping process could have a major impact on your annual shipping costs.
3. Increase Staff
One of the most common functions of a business line of credit is covering payroll. Manufacturing companies are constantly expanding their teams. In addition to increasing the workforce on the factory floor, they must seek new salespeople and marketers to attract new customers. Unlike other industries, virtually every new employee of a manufacturing company is hired to increase efficiency or productivity in a relatively short period of time. A business line of credit is designed for short-term investments. So, until they begin to finance themselves, you can use a business line of credit to cover your new employees’ compensation.
4. Seasonal Changes In Demand
The companies that are best suited for a business line of credit are frequently prone to fluctuations in revenue. A strong busy season will be followed by a potentially hazardous slow season. With a business line of credit, you can ensure the likelihood of a strong busy season and avoid having to lay off employees when business slows down. Many UCS clients use business lines of credit to order bulk quantities of materials to handle an upcoming surge in demand. They might use their funds to launch a marketing campaign that tells their customers that they can complete orders at higher speeds than their competitors.
A big reason for a manufacturing company to avoid layoffs during the slow season is the time it takes to train new employees. Even the most attentive training process cannot guarantee that a manufacturing worker will be up to speed by the time demand picks up. These orders must be filled promptly to revitalize cash flow, so you can’t have new employees slowing down the rest of the team. A business line of credit allows you to cover payroll during slow periods and keep your experienced employees on staff. Work will flow smoothly when those orders start coming in.
Increase Cash Flow Issues Are An Inevitability
Tumultuous demand often results in tumultuous cash flow, making it very difficult to be approved for any small business loan. However, companies like US Capital are well-aware that in some industries, extreme ebbs and flows in cash flow are an inevitability, as opposed to a reflection of the business owner’s intelligence or work ethic. We regularly work with companies that require extra working capital to carry them over speed bumps leading into busy periods. The more profitable these busy periods are, the smaller the speed bumps will be. Uncontrollable factors shouldn’t stop you from accessing a business line of credit. They won’t if you choose a business financing company that is not deterred by the reality of cash flow.
We Know Our Way Around Metal Manufacturing Business Loans
US Capital has access to numerous business loans geared towards metal manufacturing companies’ various financing needs. Popular functions include upgrading machines, purchasing equipment, investing in new technology, or increasing staff. But business loans don’t necessarily have to be used for revenue-generating activities. We’ve worked with metal manufacturing clients looking to cover an emergency, consolidate other debts or pay taxes without impacting cash flow.
One of our specialties is facilitating the means to make large purchases with a single, upfront payment. Unlike the fixed payments of a lease, we can negotiate a payment structure that accounts for upcoming revenue fluctuations.
Speaking of fluctuations, working capital loans are typically best for neutralizing sudden changes in demand or increases in operational costs. On the other hand, a business term loan might be better for financing resources related to larger projects that have several phases: research, development, and completion. Borrowing amounts and terms are based on the number of months or even years that will go by before a return on investment (ROI) is produced.
Planning For The Unexpected Is Our Specialty
A business line of credit is similar to a standard working capital loan but better suited for companies that regularly deal with unforeseen expenses. Planning for the unexpected is a crucial part of running a manufacturing company. With a business line of credit, you have a safety net that can be accessed at any time as long as you consistently pay off the balance.
For some business loans, the application and repayment processes are tailored for excessively busy borrowers. We are well-aware that, much like an auto shop, owners of metal manufacturing companies split their time between the shop floor and the office. They don’t have time to navigate confusing terms or wait four days to have a question answered. Rest assured: Your relationship with UCS will only make your day-to-day routine less stressful and never take you away from your most important responsibilities. Apply now to see how much you qualify for!
How Do Small Business Loans For Metal Manufacturing?
Each of the products listed above can suit a different type of expense or cash flow issue. For example, one of the biggest challenges of landscaping businesses is seasonality. Demand drops when temperatures do the same. But once the weather changes, landscaping businesses must recruit workers and secure equipment to prepare for the busy season. Landscaping Business Loans can provide the means to acquire both resources in the weeks (or even months) beforehand.
Logical solutions for this common dilemma include short-term Working Capital Loans and a Business Line of Credit. Working Capital Loans are typically best for keeping the business running during slower months since the borrowing amount is directly based on monthly bills. On the other hand, a Business Line of Credit makes more sense when the slow season comes to a close. Interest rates are lower when you can pay off the full balance as quickly as possible.
Both options can also be used to cover unforeseen expenses for large projects (i.e., extra supplies) or cover payroll when projects get delayed. If either situation is prevalent for your business, a Business Line of Credit will prevent you from having to apply for more funding every time they occur.
Maybe you’re in the middle of a project, and you need cash now, but your customer isn’t scheduled to pay for several weeks. In this case, you might consider Accounts Receivable Factoring. The business loan provider purchases the account for a discount price and then assumes the responsibility of collecting from your customer. Once the payment is collected, you receive the remainder from the initial sale, minus fees. You can also decide if you want all the money upfront or a little bit at a time.
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