Business Loan for Manufacturers and Distributors

Best Business Loans for Manufacturers

Manufacturing business owners usually have a large overhead of expenses with equipment, raw materials, staff, and real estate. Having working capital is key to meet growing demand for products. That's where Clarify comes in.

We are committed to providing manufacturers the financing needed to achieve their business goals.

By utilizing our network of 75+ lending companies, Clarify offers the lowest APRs and makes the approval process simple. Let one of our dedicated loan advisors walk you through the process and have money in the bank within 24-48 hours.

Benefits of Manufacturing Loans

Manufacturing is a resource-intensive industry that requires constant access to working capital to purchase inventory, upgrade equipment, and hire skilled professionals. Anticipating financial needs in advance is key to meeting your business goals as an owner. Clarify can provide the growth capital needed to keep up with demand.

Cover cashflow shortages

When demand is lower during seasonal trends, a line of credit or term loan can help pay for expenses and keep things running smoothly.

Buy inventory to meet growing demand

Maximize revenue potential by buying bulk inventory for your most popular products. Meet growing customer demand across your distribution channels.

Expand your operation

Grow your business by opening a new facility, buying more equipment, and hiring more qualified employees.

Research & development of new products

Fund R&D efforts to bring new products to the market. With the economy on an upward trajectory, now is the time to invest in expanding your offerings.

Upgrade manufacturing equipment

Equipment is the lifeblood of running a successful manufacturing company. A business loan makes it easy to purchase new equipment or upgrade aging technology.

Hire more skilled staff

Hiring highly qualified employees is expensive and comes with overhead expenses. Raising a financing round can cover payroll during slower market conditions.

Apply for Manufacturing Loan

Top 5 Loans for Manufacturers and Distributors

There are multiple types of small business lending options that manufacturing business owners can tap into. Navigating all the different loan types and financial terms can feel a bit overwhelming. We strive to make the process simple and transparent. Having funded thousands of businesses, where are the types of loans we recommend to manufacturing business owners:

1. Equipment Loans for Manufacturing: Best for Financing Machinery and Hardware

The success rate of manufacturers has a direct correlation to their equipment. If your machinery breaks down, business will come to a grinding halt. It's also one of the biggest expense for most business owners.

An equipment loan lets you finance up to 100% of the cost to purchase, upgrade, or repair equipment. Buying new technology or upgrading old machines can improve efficiency and output -- which will have a positive effect on your bottom line ROI.

• Apply for Equipment Financing

2. Invoice Factoring for Manufacturing: Best for Improving Cashflow

Almost every manufacturer has cash flow tied up in unpaid invoices and trade credits at some point. Invoice factoring (also known as invoice financing) lets you get your money upfront from a lender by using the unpaid invoices as collateral.

Factoring has an additional benefit: your personal credit score is not a concern since the lender would instead look at the credit rating of the business that owes you money on the invoices. The factoring process also only takes 1-2 days.

• Apply for Invoice Factoring

3. Short Term Loans for Manufacturing: Best for Immediate Capital Needs

Term loans provide your business with a lump sum infusion of cash. You get approved by Clarify for a set loan amount at a fixed interest rate that is paid back over a specified term length. We tailor the term loan to fit your specific business needs to help you achieve your goals.

Interest rates for term loans start as low as 7% and have a term length of up to 2 years. There is no collateral needed to get approved for a short-term loan through our marketplace. Funds raised with a term loan can be used for any type of business expense.

• Apply for Term Loan

4. Business Line of Credit for Manufacturing: Best for Growth Opportunities

In an ideal business scenario, you want to have access to working capital to jump on opportunities -- instead of trying to fix emergencies. A business line of credit allows you to withdraw funds from a credit line when needs arise.

A business line of credit is a hybrid funding solution that is between a credit card and a term loan. Clarify approves you for a set credit limit that is always available for you to use for business expenses. You only pay interest on amounts that are utilized, thus being a cost-efficient type of funding.

• Apply for Business Line of Credit

5. SBA Loans for Manufacturing: Best for Excellent Credit Scores

SBA loans are provided by lenders approved by the Small Business Administration. They are lump sum loans similar to term loans -- with the key difference being that they are partially guaranteed by the federal agency up to 80%. In order to qualify for an SBA loan, you need to have an excellent credit score and go through a lengthy paperwork process. As such, SBA loans are only recommended for manufacturers who are not in urgent need of funding.

• Apply for SBA Loan

Potential use of funding for manufacturing businesses

Manufacturing businesses, with their complex operations and dynamic market demands, have a range of financial needs. From upgrading machinery to scaling production or even entering new markets. Here's some potential ways to best to use your funding from Clarify:

• Bulk purchase of raw materials
• Equipment purchases & repairs
• Fulfill large orders from customers
• Development of new products
• Delivery and shipping costs
• Payroll & taxes
• Operating expenses
• Hiring new employees, training, and education
• Pandemic PPE or Covid-related costs
• Advertising & marketing
• Overcoming unanticipated business expenses
• Refinance existing debt

FAQs about Manufacturing Loans

Working capital could be the boost your manufacturing or distribution business needs. If you're on the fence, these are the questions and answers from people in your shoes.