Funding for New York Small Manufacturers and Machine Shops

The purchase-order gap

A small manufacturer wins an order, buys raw material, runs machines, inspects, packs and ships. Only then does it send an invoice, and the customer's payment terms add weeks. For a machine shop that works to a customer's print, the cycle repeats with each job. Bigger orders widen the gap: more material, more shifts and more weeks of work before the first dollar returns.

Manufacturing also carries expensive capital. Machines, tooling and inspection equipment cost a lot, and a shop with idle capacity or a failing machine loses money quickly.

What a shop pays for before it is paid

1. Raw material. Metal stock, plastic resin, components or parts that a job needs, bought in advance and sometimes in minimum quantities.
2. Skilled labor. Machinists, welders, assemblers and inspectors who are hard to find and costly to lose.
3. Tooling. Cutters, fixtures, dies and jigs, some specific to one customer's part.
4. Energy and facility costs. Power, heat, rent and maintenance.
5. Outside services. Heat treating, plating or finishing sent to other shops, which bill on their own terms.

Concentration risk

Many small manufacturers have a few major customers. That provides stability but also exposes them to large orders paid on long terms, or to a customer that delays. The cash problem becomes sharper if one buyer represents a large share of revenue and is slow to pay.

Equipment decisions

Buying a new machine can open up work the shop previously had to refuse or outsource. It is a longer-term decision and should be tested against confirmed demand, not hoped-for demand. A machine that sits idle is an expensive item.

Quotes, minimum quantities and cash planning

When quoting a job, a shop includes material, machine time, labor, outside services and overhead. The part that is easy to underestimate is the time between paying for material and receiving payment. If material is bought in minimum quantities that exceed what the job needs, the leftover ties up cash until a later job uses it.

Some shops ask customers for deposits or progress payments on larger jobs, particularly when the material is specific to that customer. That reduces the amount you have to fund yourself. Where a deposit is not possible, working capital covers the difference. In either case, write down the cash timeline of each large order: when you pay for material, when payroll hits and when the customer's payment is due.

Illustration and next step

For illustration only: a shop has a $120,000 order from a new customer, with $45,000 of material and labor needed for the first stage. The customer pays on terms after delivery. Funding that first stage allows the shop to start at once, instead of asking the customer for a deposit it may not get. The number to verify is the margin on the order, since it must cover both the work and the cost of funding.

We offer $25,000 to $5,000,000, funded in as little as 24 hours. FICO 500 and up considered, about three months of business bank statements and no tax returns. The application is five minutes with a soft credit pull. Sole proprietors can apply. Start your application.