Equipment Financing Options for Manufacturing Businesses

Do you own a manufacturing business that needs new equipment but find the costs involved daunting? Let Customers Bank guide you through some effective equipment financing options.

When growing your manufacturing business, having the right equipment is essential. However, purchasing new machinery outright can be a significant financial burden. This is where equipment financing comes in.

With equipment financing, you can acquire the necessary machinery without depleting your cash reserves or taking out a large loan. Various financing options are available to manufacturing businesses, including equipment leasing, loans, and lines of credit.

Customers Commercial Finance provides clients with the best of both worlds: the industry knowledge, responsiveness, and personal service of a specialty finance company, coupled with the financial strength, stability, and low cost of funds of a growing bank. Our team has deep industry knowledge and decades of experience building solutions that work for you.

In the manufacturing equipment arena, we have experience in:

• Automation
• Fabrication & Assembly
• Inspection/Quality Control
• Lathes
• Milling Machines
• CNC Machines
• Welding Machines
• Plasma Cutters
• Waterjet Equipment
• Stamping Press Equipment

Benefits of Equipment Financing for Manufacturing Businesses

Equipment financing offers several benefits to manufacturing businesses. First, it allows you to conserve your capital. Instead of tying up your funds in a large equipment purchase, you can use the cash for other essential business needs, such as inventory or hiring new employees. This helps maintain a healthy cash flow and ensures you have the resources to handle unexpected expenses.

Second, equipment financing provides flexibility. As technology advances rapidly, equipment can quickly become obsolete. By leasing equipment instead of purchasing it outright, you can upgrade to newer models as they become available. This ensures that your manufacturing processes remain efficient and competitive.

Equipment financing also provides tax benefits. Lease payments and loan interest are often tax-deductible, reducing overall tax liability. This can result in significant savings for your manufacturing business, allowing you to invest in other growth areas.

Common Types of Equipment Financing Options

There are several types of equipment financing options available to manufacturing businesses. The most common ones include equipment loans, SBA loans, and equipment lines of credit. Each option has its advantages and considerations, so it’s essential to understand the differences before making a decision.

Equipment Loans

Equipment loans, also known as equipment financing loans or equipment term loans, provide a lump sum of money to purchase the machinery you need. Unlike leasing, with a loan, you own the equipment from the start. The loan amount is typically based on the cost of the equipment, and you make regular payments, including interest, over a predetermined term.

Equipment loans are usually secured by the equipment, meaning the lender can repossess the equipment if you default. This provides security to the lender, often resulting in lower interest rates than unsecured loans. Equipment loans are a good option if you plan to use the equipment for an extended period or if you prefer to own the equipment outright.

Equipment Lines of Credit

Equipment lines of credit are revolving credit facilities that allow you to access funds for ongoing equipment needs. Similar to a business line of credit, an equipment line of credit provides you with a predetermined credit limit. You can borrow against this limit as needed and make payments only on the amount borrowed.

Small Business Administration (SBA) Loans

The Small Business Administration (SBA) offers loan programs specifically designed to help small businesses, including manufacturing companies. SBA loans typically have more favorable terms and lower interest rates than traditional loans. They can be used to finance equipment purchases and other business needs.

Next Steps

Don’t let the high cost of equipment hinder the growth of your manufacturing business. With the right equipment financing options from Customers Bank, you can acquire the machinery you need. One of our knowledgeable bankers would be delighted to help you through each step of the process. Get in touch with us today.