Manufacturing Merchant Cash Advance & Business Funding
Manufacturing business funding for materials and open POs.
Manufacturers spend on parts and labor weeks or months before customers pay, and an advance can fund materials against open purchase orders. Funders look for proof that past build cycles ended with customer payments landing as expected.
Who should read this: small manufacturers, fabricators and job shops, and brokers with those files.
Why do long production cycles matter to a funder?
Long build cycles matter. Money goes out for parts and labor weeks or months before the goods are paid for.
A remittance that starts the day after funding runs through that whole cycle. Funders look for evidence that past cycles ended with customer payments landing as expected.
Wholesale distributors carry the same net-term gap. Construction firms face the same long wait between cost and payment.
We're not a funder.
We don't fund deals ourselves. We shop yours with funders who do, so you see more than one offer.
Only funders that fit.
Your file goes to funders that work with your industry and your deal size. Nobody else sees it.
You make the call.
Every offer comes to you in writing. Nothing happens until you pick one.
- What it costs to apply
- Nothing. Applying costs you nothing, and Afterfirst MCA charges you no fee.
- Credit
- Ask us how each funder checks credit before you agree to anything.
- Speed
- We call you back and talk with you before your file goes to any funder.
- Offers
- Every offer shows the total payback, the payment amount, how often it comes out, and the term.
Purchase orders in manufacturing business funding
Purchase orders show a funder that demand exists for the goods being built. They don't replace bank statements, but they help explain a spike in material costs.
A PO from an established customer can support a file that shows heavy spending in the current month.
A maker with an advance already running is a Second position file. Factor rate vs APR shows why a long build cycle and a short term cost a lot together.
Material costs on a manufacturer's statement
Funders set material costs next to the deposits from finished goods. They expect buying to come first, one build cycle ahead of sales.
A long gap between them is normal for manufacturers.
Metal, resin and lumber purchases
Metal, resin, lumber and component purchases often come in large, irregular payments. Funders look for a pattern that repeats with each order.
Order-driven purchases that repeat
A purchase that repeats with each large order reads as normal cost. Matching a supplier payment to the order it served explains a big debit at a glance.
A spike in a key material's price
A sharp rise in a key material's price raises costs before the manufacturer can reprice. Margins shrink for an order or two.
Pass-through clauses that protect margin
Contracts that let the manufacturer pass through material costs protect margin. Funders may ask whether such terms exist.
Mentioning a material squeeze on your file
If a jump in material costs squeezed recent months, say so. Note any new prices your customers have agreed to. It explains the thinner margin.
Equipment payments on the same statement
Equipment loan and lease payments are often large and fixed for a manufacturer. Funders count them as part of the existing payment load. A shop with several leased machines has less room for a daily or weekly payment. The offer size reflects that.
Materials, POs and machines
Can a manufacturer use an advance to buy raw materials?
Yes, buying materials for an order is a common use. The funder will look at when the customer is expected to pay. Match the advance term to the production and payment cycle.
Are purchase orders required from a manufacturer?
Most funders rely on bank statements. Some ask for purchase orders to explain odd spending. Each funder sets its own document list. Having POs ready can help.
Is equipment financing better for a manufacturer's new machine?
For a large machine, equipment financing usually fits better. Its payments follow the machine's life. An advance may fit a smaller, urgent purchase. Compare the monthly outflow of each.
Sources
- The U.S. Census Bureau's Manufacturers' Shipments, Inventories, and Orders survey gives monthly data on U.S. Factories. It's useful context for manufacturing business funding tied to open orders.
Afterfirst is not a funder; all offers are subject to funder underwriting.
Cost, credit, speed and stacking
Cost
Credit
Speed
Stacking
Which months are slowest in this industry?
This table shows how many people private manufacturing (NAICS 31-33) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 100 | |
| February | 100 | |
| March | 100 | |
| April | 100 | |
| May | 100 | |
| June | 101 | highest |
| July | 100 | |
| August | 100 | |
| September | 100 | |
| October | 100 | |
| November | 99 | lowest |
| December | 100 |
The low point is November at 99.5 and the high point is June at 100.6, a swing of 1.1 points. Manufacturing headcount is nearly flat nationally; order timing and payment terms matter far more than the calendar.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 105 |
| Quarter 2 | 96 |
| Quarter 3 | 96 |
| Quarter 4 | 103 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
Example: say a business like this deposits $90,000 in an average month and pays a fixed $9,000 a month, 10% of that. If deposits tracked the payroll index, Quarter 2 at 96 would bring in about $86,400, and the same payment would take 10.4% of it. Plan the payment on that quarter, not on Quarter 1 at 105.
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages.
Which funding options fit manufacturers?
Each page runs one option against this industry's slow months.
Business line of credit for manufacturers
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
MCA consolidation for manufacturers
One payment in place of two, with the share of deposits before and after in a slow month.
Send one file.
See what fits.
Call 877-FUND-654 with questions.