Manufacturing
Manufacturing Business Financing
Manufacturers finance machinery, production equipment and the working capital tied up between buying raw materials and collecting on net-30 to net-60 invoices. Sagamore is a commercial loan broker that matches established manufacturers in all 50 states with lenders for equipment financing, lines of credit, term loans, factoring and SBA loans.
Written by Jordan Levy, Founder & CEO · Last updated
How do manufacturers finance production equipment?
- Who it's for
- Manufacturers adding capacity or replacing worn equipment: presses, injection molding machines, packaging and filling lines, forklifts and compressors.
- The problem
- A bottleneck on the floor caps revenue, but a new line can cost more than the plant's cash reserves, and paying cash leaves nothing to buy the material it will run.
- What fits
- Equipment financing is secured by the equipment itself, with payments spread over its working life, and many lenders finance used and refurbished equipment. For a full line with rigging, installation and electrical work, an SBA loan can cover the equipment and the soft costs together.
Products that fit
How do manufacturers fund materials while invoices are unpaid?
- Who it's for
- Contract manufacturers and OEM suppliers that buy materials up front and sell to distributors or larger manufacturers on terms.
- The problem
- Steel, resin or components are paid for at order, the production run takes weeks, and the customer pays net-45 or net-60 after delivery. A large new order can double the cash a plant needs before it sees a dollar from it.
- What fits
- A line of credit funds materials and payroll through the production cycle and repays from collections. Factoring or AR financing turns invoices to large customers into cash within days and grows with sales. Together they cover what purchase-order financing would, without a separate product.
Products that fit
How do machine shops finance CNC and precision machinery?
- Who it's for
- Machine shops and fabricators buying CNC mills and lathes, Swiss-type machines, laser and waterjet cutters, press brakes or CMMs.
- The problem
- A 5-axis machining center or a fiber laser can run well into six figures, and the shop often needs it to win the job it is quoting. Lead times mean the deposit is due long before the machine cuts a part.
- What fits
- Equipment financing covers new and used CNC machinery from dealers, auctions and other shops, often including tooling and installation. Some lenders defer the first payment while the machine is installed and commissioned. A term loan covers fixtures, CAM software and other costs that don't qualify as collateral.
Products that fit
Eligibility
What do you need to qualify?
Sagamore is a broker, not a lender. One application is matched with lenders across all 50 states, and every program starts from the same minimums. We work with established businesses only, so startups are not eligible.
- Credit score
- 600+
- Time in business
- 1+ year
- Annual revenue
- $400K+
Frequently Asked Questions
Common questions about manufacturing financing
Yes. Many equipment lenders finance used and refurbished CNC machinery from dealers, auctions and other shops. The machine's age, condition and resale value shape the terms, and lenders want the seller's quote and the machine's specifications.
Most use a line of credit for materials and labor during production, then factoring or AR financing to turn the resulting invoices into cash instead of waiting net-45 or net-60. Together they cover what purchase-order financing is meant to.
Yes. SBA 7(a) loans can cover equipment, and SBA 504 loans finance major fixed assets like heavy machinery and buildings over long terms. They take longer to close than equipment financing, so they suit planned expansions better than urgent replacements.
An equipment quote or invoice and recent business bank statements, plus at least a year in business, a 600+ credit score and $400K+ in annual revenue. Larger amounts may need tax returns and financial statements.
Guides
Which guides cover manufacturing financing?
- Should You Finance or Lease Business Equipment? Costs, Taxes, and Section 179 in 2026Financing builds ownership; leasing lowers monthly cost. A 5-year cost comparison, how the two lease types differ, and 2026 Section 179 limits.
- SBA 7(a) vs. SBA 504 Loans: Which Fits Your Business?SBA 7(a) vs. 504 in 2026: down payments, rates, fees, and uses compared, with a worked $2 million building example showing the monthly difference.
- Invoice Factoring vs. Accounts Receivable Financing: What's the Difference?Factoring sells your invoices; AR financing borrows against them. Compare control, cost, customer visibility, and qualification, with a worked example.
- How Does Invoice Factoring Work? Advance Rates, Reserves, and Fees ExplainedInvoice factoring step by step: how the advance rate, reserve, and fee work, with a worked $50,000 example and what it costs at different payment dates.
- What Is a UCC Lien (UCC-1 Filing), and How Does It Affect My Business?A UCC-1 filing is public notice that a lender has a claim on your business assets. Blanket vs. specific liens, how long they last, how to remove one.
By state
Which state guides cover manufacturing financing?
Each state guide covers its disclosure law, SBA offices and state loan programs. All state guides
Related Funding Options
Which funding options fit manufacturing?
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