Fund raw material purchases, upgrade manufacturing equipment, or bridge long payment terms with working capital built for manufacturing and wholesale distribution.
Manufacturing and wholesale businesses face capital-intensive challenges: raw material procurement, equipment acquisition, large inventory purchases, and managing cash flow while waiting for net-30 to net-90 invoices to be paid. Our lenders offer larger funding amounts with terms designed for manufacturers and wholesale distributors.
Manufacturing and wholesale businesses generate substantial fundable assets: inventory, accounts receivable, equipment, and often real estate. The combination opens lender categories closed to most service businesses — particularly asset-based lending (ABL) and SBA 504 real estate financing. The trade-off: heavy capital intensity (working capital tied up in inventory and AR for 60–120 days) means manufacturers structurally need credit facilities that scale with operations.
The lender market is mature here. Asset-based lenders advance 70–85% on AR and 40–60% on inventory at rates 200–400 basis points below unsecured products. SBA 504 funds real estate purchases at the lowest fixed rates available to small businesses. PO financing covers material purchases for confirmed orders. Manufacturers with 3+ years of operating history and clean financials typically have 4–6 lender categories available, allowing genuine optimization across products.
| Product | Fit | Notes |
|---|---|---|
| Asset-Based LOC | Strong fit | Borrowing base on AR + inventory. Limit recalculated monthly. 8–14% APR. Best for $1M+ revenue. |
| SBA 504 Real Estate | Best for property | Manufacturing facility purchase or major expansion. 7.5–9.5% fixed (debenture). 10–25 year terms. |
| SBA 7(a) | Mixed-use loans | Working capital + equipment + real estate combined. 9.75–13.25% APR. Up to $5M. |
| Equipment Financing | Standard | CNC machines, production lines, industrial equipment. 8–14% APR. Equipment-secured. |
| PO Financing | For order-driven cash needs | Pays suppliers for confirmed customer orders. Cleared as customer pays. 1.5–3% monthly on advanced amount. |
| Invoice Factoring | For working capital | B2B AR financing. 80–90% advance on receivables. 1.5–3% monthly factor fee. |
The 6 most common capital deployments we see in manufacturing & wholesale businesses, with the funding product that fits each.
New CNC machines, automation, additional production lines. $200K–$5M. Equipment financing or SBA 7(a) for combined asset + working capital.
Plant or warehouse purchase. $1M–$15M. SBA 504 for cheapest fixed-rate real estate financing.
Initial production run, raw materials, components. $100K–$2M. PO financing or asset-based LOC.
Confirmed PO from major customer requires upfront materials/labor. PO financing or factoring against the eventual invoice.
Roll-up of $1M–$10M revenue manufacturer. SBA 7(a) for under $5M; commercial term loan or PE for larger.
Build inventory before peak retail season. $500K–$5M. Asset-based LOC against inventory + AR.
Beyond the standard credit + revenue + time-in-business thresholds, manufacturing & wholesale businesses face industry-specific underwriting variables.
Asset-based lending (ABL) provides a revolving line of credit secured by accounts receivable and inventory. Limit is recalculated monthly based on the "borrowing base" — typically 80–85% of eligible AR plus 40–60% of eligible inventory. Rates 8–14% APR (Prime + 1.5–7%). Best for manufacturers with $1M+ revenue, structured AR, and ability to provide monthly borrowing-base reporting.
Asset-based LOC: 80–90% of AR + 40–60% of inventory, often $500K–$10M+. SBA 7(a): up to $5M. SBA 504: typically $1M–$15M for real estate. Equipment financing: equipment value, $50K–$2M+ per piece. PO financing: up to confirmed order value.
PO (purchase order) financing pays your suppliers directly for materials needed to fulfill a confirmed customer order. The lender clears the loan when the customer pays the resulting invoice. Best for manufacturers with confirmed orders that exceed working capital. Common in import/export and contract manufacturing. Rates 1.5–3% per month on the financed amount, plus letter-of-credit fees.
Standard equipment financing: 5–14 business days. Manufacturer captive finance (CNC machine builder offering financing on their own equipment) can fund in 3–7 days. Larger equipment ($500K+) may take 14–30 days for asset valuation and structuring.
Yes — SBA 504 is specifically designed for this. Buying a manufacturing facility, expanding existing operations, or building new construction all qualify. Structure: 50% bank loan + 40% SBA-licensed CDC at fixed debenture rate (7.5–9.5% currently) + 10–15% buyer down payment. Total effective rate often 8–9.5%. Process takes 90–120 days due to dual-lender coordination.
Heavy package. Last 3 years of business tax returns, last 2 years of personal returns, year-to-date P&L, balance sheet, AR aging, inventory list with values, equipment list with values, customer list with concentration analysis, last 6 months of bank statements, debt schedule. ABL adds borrowing-base certificate and customer credit reports. SBA adds business plan, property appraisal (504), equipment quotes.
Yes, with conditions. SBA 7(a) can refinance existing business debt if you can demonstrate the new loan reduces total debt service by 10%+ and/or extends maturity. Common targets for manufacturers: high-cost MCAs, expensive bridge loans, balloon bank debt, supplier financing. SBA 7(a) refinancing typically takes 60–90 days.
Asset-based options are most credit-tolerant. Factoring funds down to 550 FICO if customers are creditworthy. PO financing similarly looks at the customer's credit. Equipment financing typically requires 600+ but specialty lenders go to 560 with larger down payments. Below 550, options narrow significantly — often only specialty MCA at high rates.