The consumer durables industry has been recording steady growth over the past few years, presenting numerous opportunities for manufacturers. However, to stay on top of your game as a manufacturer, it is vital to have sufficient working capital to effectively meet your day-to-day obligations. Working capital ensures you have sufficient cash flow to maintain an uninterrupted flow of production and are prepared to face any business crises that may arise.
Here is what to know about working capital loans for manufacturing:
What Can Working Capital Be Used For?
There are many options to consider when you want to increase your working capital. These include borrowing money, leveraging tax incentives, managing inventory, and selling long-term assets for cash. Before borrowing, you will need to establish whether working capital loans are right for you. Here is what you can use the money for:
Bridge Payment Delays
In many industries, when there are delays in receiving cash for your products, you will have to find a way to bridge the gap. As a consumer durables manufacturer, being late on your bills can result in high fees and interest rates. A working capital loan tends to be cheaper than paying off credit card fees or accrued interest, which can save money over time.
Meet Your Payroll Obligations
As your business grows, payroll costs are likely to increase. However, even with a skilled and dedicated team, it will take time before you see a positive return. When revenue lags, working capital will help you meet your payroll obligations to retain the talents that generate revenue for your company.
Buy Materials and Hire Quality Employees
Often it’s advantageous for a business to stock up on products to meet high demand season, prepare for the rollout of a new product campaign, or purchase in bulk to qualify for discounts, a working capital loan can cover both inventory costs and employee overtime. Restocking your inventory allows you to manufacture goods without interruptions while empowering your team will help you get ahead. This guarantees that inventory does not hold back the production line. A competitive compensation package can also ensure you attract the best talents and keep your employees motivated.
Cover Shortfalls Due to Unexpected Events or Seasonality
Unprecedented events or seasonal business models can lead to a decrease in big-ticket manufacturing demand. Businesses can experience slowdowns that will have a huge impact on their operating capital. To manage your cash flow and cover recurring expenses, you can consider taking out a working capital loan. This loan can help you take care of your financial responsibilities when times are tough. A working capital loan can help you plan for seasonality in your specific industry and can ensure that you will be able to stay afloat until business picks up.
Marketing and Advertising
Marketing savvy manufacturers can use the extra cash flow to bolster their advertising efforts. The extra cash flow from a working capital loan can enable you to promote your business and try out new marketing tactics like event sponsorship, increase ad spend, community outreach, and social media marketing. You can also hire experts to help you run an effective marketing campaign.
Expansion and Growth
Working capital loans can be used to expand your manufacturing operations which can come in the form of increase in company size, office space, or labor investment. With quick cash flow funding available you can achieve your short-term goals without affecting your daily operations. It’s crucial to point, when looking to expand your business operation, ensure a solid customer base to aid during the high-growth period as well as a continuous high-growth to offset long-term costs.
Getting a Working Capital Loan for Manufacturing
You can apply for a consumer durables manufacturing loan from LQD Business Finance to help you continue your daily operations when you encounter unexpected cash flow gaps. Below are the steps you will need to follow to secure the right type of funding for your needs.
Check Your Credit Score
Your credit score will determine whether you come across as trustworthy or a risky borrower in the eyes of lenders. Take some time to check your creditworthiness to know whether you are likely to qualify for funding. Depending on the size of the loan, make sure that your financial statements are in order.
Weigh Your Options
LQD Finance offers a large variety of commercial lending solutions. It is important to look at the loan qualifications, interest rate, fees, loan terms, and more. If you are unsure of what options are available, contact us and we would be happy to assist you.
Apply for Funding
Ensure you have all the proper business documentation needed to speed the process. Part of the information that may be required is the name of the business, legal structure, financial statements, projected financial statements, business bank statements, tax returns of the company, business credit report, amount of loan requested, and potential collateral.
Wait for Approval
Once you have submitted your loan application, you should wait for the loan to be approved. If approved, LQD Finance is able to provide working capital funding within 30 days.
Why You Should Consider Alternative Lending from LQD Finance
Our alternative lending solutions are a great option to consider when looking for manufacturing loans for your consumer durables business. Here are a few reasons why you should consider LQD Finance for your financing needs.
Quick and Easy Application Process
Our streamlined and transparent loan application process requires that you submit basic business information and financial data. We are a tech-savvy lender, making it possible for you to quickly and easily complete the entire application process. LQD Business Finance strives to expedite funding in less than 30 days.
More Flexible Borrower Requirements
LQD Finance works with different companies, including businesses that do not have the resources necessary to accelerate growth. We use not only proprietary technology to consolidate credit but also have flexible borrower requirements. This approach makes it easier for more businesses to qualify for our loans.
The needs of our customers vary widely. Unlike banks and other lenders, we provide flexible financing to accommodate a broad range of needs, including funding for growth, acceleration, working capital, and other reasons.
We Value Building Relationships
As a company, we place great value on building healthy relationships with our customers. We are dedicated to helping businesses succeed, and this is why we will work on ensuring you get lower interest rates on loans over time.
The next time you need a loan for a manufacturing company, you should look no further than LQD. We are committed to understanding your needs and offering the right financing solutions for your business. Contact us today to learn more about our manufacturing funding opportunities.