Business Loans For Manufacturers: Q&A With Evan Singer

Many manufacturing companies experience growth as the economy recovers from the recent recession. Some, however, complain that they are having trouble finding business loans needed to stimulate production.

I discussed the current economic climate for manufacturing and alternative ways manufacturers can receive business loans with Evan Singer of SmartBiz.

Bridget Bergin (BB): What are some economic challenges facing manufacturers today?

Evan Singer (ES): One of the biggest challenges facing manufacturers is how to secure inexpensive financing to grow their business.  Although banks are typically happy to help securing financing for large companies, if a manufacturer is looking to purchase new equipment, or get working capital for less than $350,000, their options to borrow money are limited.  In fact, many banks don’t even offer smaller loans to businesses or these loans can take months. Alternative lenders are typically faster but expensive. It’s challenging for a smaller manufacturer to grow with expensive debt capital. 

BB: What are obstacles faced by manufacturers seeking loans from banks?

ES: If a manufacturer is looking to borrow a large sum of money and they have decent cash flow, they can usually find a way to borrow money from a bank. If they are looking for a smaller-sized loan, banks might not be interested as it costs a bank the same amount to originate a large-sized loan as it does a small-sized loan. There’s also an issue about how much time it takes to apply for such a loan, which can pull the business away from their daily obligations and goals. However, there are new online options available today which speeds up the entire process and makes it more efficient for both borrowers and banks. For example, SmartBiz offers $5,000 to $350,000 SBA bank loans online with 6 percent to 8 percent interest rates and funds that are available in as fast as seven days.

BB: What are alternative ways for manufacturers to receive business loans, and what kinds of loans are best for manufacturers?

ES: Manufacturers often use term loans to purchase new equipment, refinance existing business debt, increase their working capital, execute marketing campaigns or even hire new team members. There are many new online lending solutions available today designed to help small businesses quickly and easily access the capital they need to grow and succeed at different stages of their development. However, beware most alternatives are easy but expensive.

BB: What steps can manufactures seeking loans take to be sure they are granted the loans?  

ES: Most importantly, manufacturers need to confirm that they have sufficient cash flow to be able to make their loan payments on a monthly basis. Next, businesses and business owners should ensure they have a good credit history.

BB: What are some predictions for the economy and manufacturing in 2015?

ES: Unemployment rates are dropping, fuel prices are lower and the economy is growing. There are millions of small businesses seeking capital to grow today. Many people are bullish on their business and their business’ future. For example, at SmartBiz, we processed $450 million in applications in 2014. This year, we are expecting over $1 billion. We believe companies will continue to purchase new manufacturing equipment, borrow to increase their working capital, hire and execute new marketing campaigns.


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