Industry guide
Business finance for manufacturing
Manufacturers buy materials, convert them, then wait to be paid — often three separate cash-flow events across a couple of months. Finance covers both the machines and the gap in between.
Manufacturing finance is capital equipment lending combined with working capital for raw materials, covering CNC machines, presses and packaging lines as well as the gap between buying stock and being paid for finished goods.
The working capital cycle in manufacturing is long by nature. Steel, resin or componentry is purchased and paid for, sits as raw material, moves through production as work in progress, then becomes finished goods that are invoiced on 30 to 60-day terms. A business growing 30% a year needs 30% more cash tied up in that cycle simply to stand still. This is why profitable manufacturers routinely run out of money during growth, and why trade finance and invoice facilities matter as much as machine finance.
On the capital side, Australian manufacturing has moved toward automation: CNC machining centres, laser cutters, robotic welders and automated packaging lines. These are expensive, long-lived, and often imported, which brings currency, deposit and shipping-lead-time complications that general lenders handle badly. Lenders on our panel who specialise in manufacturing plant will fund progress payments to an overseas supplier and settle on commissioning rather than on the bill of lading, which can be the difference between a deal working and not.
The cash-flow pattern we plan around
Cash out for raw materials, then weeks of work in progress, then 30–60 day terms on finished goods — a cycle that lengthens as the business grows.
What manufacturing typically fund
- CNC machines, lasers and press equipment
- Packaging and materials handling lines
- Raw materials and imported componentry
- Forklifts and factory logistics
- Factory fit-out, power upgrades and compliance works
Documents lenders usually ask manufacturing for
- ABN, GST registration and two years of financials
- Supplier quote or proforma invoice for the machine
- Debtor ledger and aged receivables report
Finance options for manufacturing
Machinery finance for manufacturing
A CNC machining centre or fibre laser is a five-to-ten-year asset and should be financed like one. Machinery finance funds the purchase against the machine itself, and specialist lenders will handle the awkward parts of an imported capital purchase: a deposit to the manufacturer, a progress payment before shipping, and final settlement once the machine is installed and commissioned in your factory.
Chattel mortgage for manufacturing
For a GST-registered manufacturer a chattel mortgage over a press, router or packaging line means ownership from settlement and a GST claim on the full purchase price in the next BAS. On a $400,000 machine that is a meaningful cash injection at the exact moment you have just committed capital.
Trade finance for manufacturing
Trade finance funds the gap between paying an overseas supplier and being paid by your customer. For a manufacturer importing steel, resin, electronics or components, a facility can settle the supplier at shipment and give you 90 to 150 days to convert and sell.
Invoice finance for manufacturing
Once goods are shipped and invoiced, invoice finance converts that receivable to cash immediately instead of in 45 days. For manufacturers this is the natural companion to trade finance: one funds the input, the other releases the output.
Business line of credit for manufacturing
A line of credit handles the smaller irregularities a manufacturer faces — a tooling run, a maintenance shutdown, a bulk material buy at a good price. Draw it, repay it, leave it available.
Sale and leaseback for manufacturing
Manufacturers often hold significant equity in machines bought outright in better years. A sale and leaseback converts that equity into working capital while the machines keep running — useful when a large order requires materials you cannot fund from the current balance.
Assets we finance for manufacturing
Lenders active in this space
Metro Finance, Moneytech, ScotPac, Flexicommercial — among others on our panel of 18+. Your broker checks fit before anything is submitted.
Key terms
Manufacturing equipment finance
Manufacturing equipment finance is secured lending for production machinery such as CNC machining centres, laser cutters and packaging lines, often structured to fund supplier progress payments and to commence repayments on commissioning.
Working capital cycle
The working capital cycle is the time between paying for raw materials and receiving payment for the finished goods made from them, during which the business funds the value of that inventory itself.