With the number of small business loans available in the market for manufacturers, you don’t have to worry about funding your industrial business. In fact, there are several manufacturing loans that are perfect for your business. However, it’s important to remember that the terms and conditions of these loans vary from lender to lender. So, be sure to take credit, collateral, repayment terms, and interest rates into account when shopping for manufacturing loans Detroit.
1. Business Line of Credit
There are times when manufacturing businesses need to access immediate funding in order to seize amazing business opportunities. Whatever the case may be, the need is for you to be able to quickly access funds to pay for materials, labor, and other business expenses in order to keep up with the growing demands of your business.
Applying for a business line of credit is a great way for a manufacturing business to fund cash flow gaps or take advantage of business opportunities. A business line of credit functions like a business credit card and small business loans. Once qualified, potential lenders will assign you a predetermined credit line, which can go up to $1,000,000 for an eligible business.
The biggest advantage of a business line of credit is that you don’t have to use the funds unless you really need to. And you don’t have to pay back the entire credit line, you only have to repay the funds you’ve used, plus the interest.
2. Equipment Financing
Equipment is very important in every manufacturing business. If your hardware isn’t working right, then your business is compromised. A manufacturing equipment loan will help you cover the costs of acquiring or repairing equipment.
Equipment financing is a ‘self-secured’ loan. This means that if you default on the loan, lenders have the right to seize the equipment. It may sound daunting, but it’s actually better for you and your business because with collateral, it’s easier to qualify for equipment financing.
3. SBA Loans
If you own a business, then you’ve probably heard of SBA loans. The Small Business Administration designed these loans to help small businesses secure funding. SBA loans are guaranteed by the Small Business Administration by up to 80%.
SBA loans offer flexibility, lower interest rates, and generous repayment terms that can depending on the type of loan, last up to 25 years . It’s no wonder why SBA loans are the most popular loan option among small business owners.
4. Invoice Financing
Invoice financing or accounts receivable financing, can help your business free up cash flow. It involves selling your outstanding invoices to third-party companies at a discount. Lenders or factoring companies usually give you between 85% to even 95% of the total value of your invoices up front. Once your customers pay their balances in full, the factoring company sends you the remaining portion of the invoices, minus a small transaction fee. This is a great option for businesses that can’t afford to wait for months before getting paid.
Manufacturing Loans Detroit
If you want to explore your business finance options, SMB Compass experts can help you. We have financed over 1000 businesses across the United States, and we’re confident we can help you too.