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How to choose the right funding option for your manufacturing business

Manufacturing is one of the toughest industry’s to be a part of, you will be exposed to economic conditions and the inflation of material prices making it a major challenge to maintain positive cashflow, even if you think your business is doing well. A lot of manufactures rely on having good funding products in place, either all the time or at key moments in business growth or they require a cash injection to help them move onto the next level.

There are a couple of things that you need to think about to make sure that you are choosing the right funding option for your manufacturing business…


Considering your business needs:

The first thing you need to do is think about what you need, a lot of businesses will pursue finance but have no idea on what they want or what they need from their finance product.

Raw materials are one of the largest costs a manufacturing business needs and with finance you will be able to secure large volumes at a good price or when the prices start to go up you will have the cashflow to help.

Another big financial consideration is machinery and equipment. Depreciation of assets can be costly, so you need to think about how you want to take the hit of depreciation.

If you want funding for just expanding your business, you need to investigate what you need, the returns it will generate and then find what’s out there that will help you.  


Identifying the most appropriate product:

Once you have figured out what you need funding for then you need to find the funding product that suits you.

You need to make sure that you have explored every option and compare all the quotes to find the best deal for you.

Invoice finance is a popular solution for manufacturing businesses as it takes away the strain of late or non-payments of invoices, when you raise an invoice the finance provider will pay you up to 90% of the value of it instead of waiting up to 30 days.



Added: 22 Jul 2019 13:32

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