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Commercial Finance Options for Manufacturers 

Estimated Read Time: 5 Minutes

Diksha Chaphe , 14 June, 2024

The manufacturing industry is witnessing a surge in demand for goods and services as it expands its reach to the global population, resulting in heightened demand for rivals and competitors.

Numerous brands are thriving in this competitive market, and the sector is experiencing a steady influx of new entrants. As a result, there is a rising need for loans to facilitate the growth and expansion of manufacturing businesses.

Before diving into the lending process, manufacturers need to understand their financial requirements clearly. Questions regarding the types of financing available, maximum loan amounts, repayment terms, and eligibility criteria are common.

Nucleus is here to guide you to the right path with a financial product lending institution that provides loans to small and medium-sized enterprises (SMEs) to support their growth, expansion, working capital, and other business needs across various sectors.

Manufacturers frequently need to secure various commercial financing sources to support their operations. Here are a few typical choices:

  • Term loans: Term loans offer lump sums of capital that manufacturers can use for various purposes, such as equipment acquisition, expanding facilities, or covering operational expenses. These loans typically have fixed interest rates and repayment terms.
  • Lines of credit: A line of credit gives manufacturers access to a revolving credit facility, allowing them to borrow funds up to a predetermined credit limit. This flexibility helps manage cash flow fluctuation and cover short-term expenses.
  • Asset-based lending (ABL): ABL enables manufacturers to obtain secure financing using their assets as collateral, such as inventory, machinery, equipment, or accounts receivable, to determine the amount of credit available to lender access to these assets.
  • Invoicing finance: Invoicing finance is often called account receivables finance. This choice entails offering a lender discount on unpaid invoices in exchange for quick cash to improve manufacturers’ cash flow by advancing.
  • Equipment financing: Manufacturers can make finance purchases on equipment loans or leases, which serve as collateral, making these finance options credible for company history and giving advantages to the company.
  • Export financing: Manufacturers who export their products can use export financing solutions like export credit insurance, export factoring, or export bank loans to reduce risks and streamline international trade.
  • Crowdfunding and peer-to-peer lending: Choosing the right finance option depends on peer-to-peer lending, and crowdfunding is an example of an alternative financing platform that enables manufacturers to raise money from backers of crowdfunding campaigns or individual investors. Although conditions and interest rates can change, these platforms provide access to capital outside conventional banking channels.

Choosing the right option depends on credibility factors that can secure a loan, including the manufacturer’s financial status, growth goals, collateral availability, balance sheet, cash flow, income statement and risk tolerance, which must be considered when planning a commercial finance option. Attempting to make well-informed decisions carefully requires evaluating each option and conversing with financial advisors or industry experts.

Our Finance Options for Manufacturers

Nucleus Business Loans (NBL):

NBL are flexible for companies looking for funding without worrying about collateral requirements. NBL can provide loans ranging from £5,000 to £2 million, with short-term and long-term financing options. Companies can customise their loan terms from three months to six years to fit their cash flow needs and financial goals.

Nucleus Business Loans serve many use cases, such as emergency repairs, debt settlement, equipment upgrades, marketing campaigns, working capital infusions, and inventory replenishment. It is a sensible option for companies that want to manage their financial challenges successfully.

Types of NBL Finance:

  • NBL Short: Nucleus Short-Term offers funding ranging from £5,000 to £25,000, with a repayment window of 3 to 24 days.
  • NBL Medium: Nucleus Medium Term provides financing from £25,000 to £250,000, with a repayment period of 25 to 60 days.
  • NBL Large: Nucleus Large Term Finance extends funding from £50,000 to £500,000, with a repayment timeframe of 37 to 72 days.
  • NBL Long: Nucleus Long Term Finance caters to more extensive financing needs, with funding from £500,000 to £2 million.

Nucleus Revenue-Based Loans (RBL):

Businesses with variable revenue streams can benefit from RBL Loans’ special financing. These loans allow for flexible repayments based on monthly revenue, mirroring a business’s turnover.

Companies that want to support growth and manage cash flow fluctuations can now access scalable financing options with the ability to borrow up to 200% of their monthly revenue. RBL offers a modest funding range from £3000 to £150,000 with a prerequisite of at least two years of industry trading.

Monthly instalments are obligatory to repay the borrowed sum. The repayment window spans from 3 months to a maximum of 12 months. These terms enable businesses to handle their financial needs effectively and efficiently, from working capital to marketing and equipment purchases, with prompt decisions, steady payments, and a wide range of use cases.

How the Nucleus Finance Process Works

  • Application Process: The application process for a manufacturing business interested in applying for a loan from Nucleus involves four steps. This application typically requires information about the company, loan information, director information, and finally, documentation of your LTD, along with open banking and open accounting linked for the creditability process.
  • Evaluation: Nucleus evaluates the application, considering factors such as business trade credit, cash flow, collateral, industry experience, and the feasibility of the proposed loan purpose. It may also review the business plan and potential growth.
  • Loan Approval: If the application meets the lender’s criteria and is approved, Nucleus offers a loan with specific terms and conditions. These terms may include the loan amount, interest rates, tenor timeline, repayment schedules, and collateral for recovery.
  • Funding: Once the loan is approved, Nucleus disburses the funds to the manufacturing businesses. The business can use the funds for financial growth, purchase equipment, hire employees, or cover other expenses.
  • Repayment: Manufacturing businesses must repay the loan according to the terms outlined in the loan agreement, which usually involves making regular payments. NBL offers a monthly repayment plan, while RBL provides weekly payment plans. These payments may include principal and interest and must be made over a specified period.
  • Support and monitoring: Throughout the loan term, Nucleus may support and monitor the manufacturing business’s progress. This can include a period review of financial performance and assistance with loan management over a specific period.

In summary, Nucleus offers comprehensive lending options to satisfy diverse requirements for manufacturing companies such as NBL and RBL. These options range from short-term to long-term and facilitate growth, expansion, and cash flow management. Nucleus curates a simple application process, quick assessment, and open loan approval that guarantees the company can make quick decisions and adequate fund disbursement.

Furthermore, Nucleus is dedicated to guiding companies through the loan procedure and providing oversight to assist their success. Manufacturing companies looking for financial advice can take advantage of the opportunity to overcome obstacles in the competitive environment and rely on Nucleus as a reliable partner.

Ready to reach new heights with Nucleus for your manufacturing business? With us, you can obtain funding for all your needs. Our tailored asset-based lending solutions are designed to promote development, success, and innovation. Financial obstacles should prevent you from taking advantage of opportunities to grow, explore the industry, and enhance your operation. Reach out to us, sign up now on Nucleus, and unlock your company’s full potential.


BY Diksha Chaphe

5 MIN

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