Growth Financing Through Asset-based Lending
The North American manufacturing industry contributes significantly to the economy. With more than 10% of Canada’s GDP, the sector accounts for $174b CAD of total GDP. In the U.S, manufacturing accounts for 11.39% of total output. Small and medium scale manufacturing businesses play a huge role in the sector, especially with regards to exports. Small businesses accounted for 96% of all United States exporters. To meet up with global demand, small businesses require undisrupted access to funds to support internal and external growth. Growth financing solutions for the manufacturing industry are essential to the expansion of businesses and the economy at large.
Manufacturing businesses rely substantially on heavy machinery and equipment, the acquisition and maintenance for which make up a huge part of capital and operating costs. Manufacturing processes, usually complex in nature, also require adequate resources for inventory, human capital, supply chain, purchases, logistics and other operating costs.
Availability and ease of access to funds is crucial for growth financing, and where traditional banks do not meet the unique needs of a growing business, alternative lenders become essential. Manufacturing businesses can explore asset-based lending solutions to meet growth financing needs.
Asset-based Lending Financing Options
What growth financing options exist for manufacturing businesses? Here are a few asset-based lending options to consider:
Equipment financing: Small and medium sized businesses with competing cash needs can explore equipment financing through leasing or equipment loans. Businesses may have the option to use existing equipment as collateral to obtain new equipment financing.
Inventory financing: Eligible inventory purchases can be funded through a line of credit or loan which are in turn collateralized by the inventory. Businesses without adequate history or other complex requirements from traditional banks can access funds for growth and expansion through inventory financing from non-conventional financial organizations.
Accounts receivable financing: Manufacturing businesses with cash locked up in accounts receivable can access cash more quickly with less strict collateral requirements through accounts receivable financing and factoring. Growth financing can be accessed by using eligible accounts receivable balances as collateral for new loans or by factoring and selling accounts receivables to factoring agencies.
Accord Financial – Simplifying Access To Growth capital
With challenging business conditions and changing economic dynamics, manufacturing businesses need access to funds for growth. Expanding manufacturing operations can be pursued with ease by partnering with Accord.
Accord Financial specializes in growth financing solutions for small to medium sized businesses . Irrespective of the stage of operation and/or growth, Accord provides access to capital through loans or a line of credit, accounts receivable financing and other forms of asset-based lending solutions.
Businesses that cut across various manufacturing sectors such as automotive, aerospace, food and consumer goods needing growth financing or other cash flow needs would benefit from and leverage on the expertise from the manufacturing finance team at Accord.