If you run a manufacturing company, you already know this truth: machines can’t run on empty—and neither can your cash flow. Between raw materials, payroll, equipment maintenance, and rising supply costs, keeping production on schedule requires reliable working capital.
But when clients take 30, 60, or even 90 days to pay their invoices, even the strongest production line can grind to a halt. That’s why understanding your financing options isn’t just smart—it’s essential for survival and growth.
At American Receivable Corporation, we’ve spent over four decades helping manufacturers get the capital they need to keep their operations running strong. Let’s break down the most common types of manufacturing financing options—and how to choose what’s best for your business.
1. Invoice Factoring (Accounts Receivable Financing)
If your customers pay on credit terms, invoice factoring (also known as receivable financing) can be a game changer. Instead of waiting weeks or months for client payments, you can sell your outstanding invoices to a factoring company and receive up to 95% of their value within 24 hours.
Here’s how it works:
- You complete a job and issue an invoice to your customer.
- ARC purchases the invoice and advances you most of its value immediately. 3. When your customer pays, ARC sends you the remaining balance minus a small fee.
Best for: Manufacturers with steady sales and slow-paying clients.
2. Business Lines of Credit
A business line of credit works like a revolving loan—you borrow what you need when you need it, and pay interest only on what you use. This flexibility makes it ideal for manufacturers who experience seasonal demand, fluctuating material costs, or production delays.
However, unlike invoice factoring, lines of credit typically require strong credit, collateral, and financial documentation. Banks may also reduce or revoke limits during market downturns—right when manufacturers need funding most.
Best for: Established manufacturers with predictable revenue and strong credit.
Benefits: Ongoing access to capital for short-term needs or emergencies.
3. Equipment Financing
Manufacturing depends on machinery—and machinery isn’t cheap. Equipment financing helps companies purchase or lease new tools, vehicles, or technology without paying the full cost upfront.
The equipment itself usually serves as collateral, making it easier to qualify than a traditional loan. You’ll make regular payments over a set term, and once it’s paid off, you own the asset outright.
Best for: Manufacturers needing to upgrade or replace equipment.
Benefits: Preserves working capital while allowing you to stay competitive with new technology.
4. Working Capital Loans
A working capital loan provides a lump sum of cash to cover short-term expenses like payroll, utilities, or material purchases. Unlike factoring, these are debt-based, meaning you’ll need to repay them with interest.
While these loans can fill an immediate gap, approval often depends on personal or business credit scores, and repayment schedules can strain cash flow if customer payments are delayed.
Best for: Short-term funding during slow seasons or large purchase cycles.
Benefits: Quick cash injection for daily operations or one-time expenses.
5. SBA Loans
Small Business Administration (SBA) loans are government-backed, low-interest loans designed to help small businesses access affordable financing. They’re great for long-term growth projects—like expanding your plant, hiring new staff, or purchasing major assets.
The catch? The application process can take weeks or even months, and qualifying can be difficult without strong financial history.
Best for: Established manufacturers planning long-term growth.
Benefits: Low interest rates and extended repayment terms.
Comparing Manufacturing Financing Options
The Smart Manufacturer’s Move: Stay Funded, Stay Flexible
In today’s fast-moving market, manufacturers need more than great products—they need consistent cash flow. The right financing partner can mean the difference between scaling up production or shutting down early.
American Receivable Corporation has been helping manufacturers since 1979, providing reliable invoice factoring and receivable financing solutions that turn unpaid invoices into instant working capital.
Whether you’re supplying auto parts in Dallas, building components in Austin, or shipping materials nationwide, ARC helps you bridge cash flow gaps, fund growth, and stay competitive. Manufacturing keeps America moving—but even the best operations can stall without steady cash flow. From invoice factoring to equipment financing, you have options. The key is choosing the one that fits your growth goals, cash flow cycle, and comfort level with debt.
If you’re ready to power your production with better financing, American Receivable is here to help.
