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    5 Replies Latest reply on Feb 14, 2009 3:07 PM by Lighthouse24

    whats the best way for an existing manufacturer expand

    valintech Newbie

      My company is seeking funding to grow to serve some new clients. We are currently manufacturing plastic contracted products. Our goals for this year is to attract larger more lucrative clients, (medical devices, aerospace/military, and government) Our current level of production is maintaining our small clientele, we need some updates to our equipment, add workers in production, as well as the certification programs required, (ISO9001 ie.). What are the best avenues for a small company to entertain and have an audience with legitimate investors, loans, or partnerships?
        • Re: whats the best way for an existing manufacturer expand
          bmt2008 Adventurer
          This is an asset based lending environment. Some options you may have:

          Factor your receivables - you can either receive funds for current accounts receivables or get a line of credit based on current and future receivables.

           


          Business Cash Advances. Do you take credit cards as a form of payment? You could get an advance (not a loan) based on FUTURE credit card payments.

           


          Equipment loan/leases: If you need new equipment, you can get a loan or lease based on that equipment. You can also sell your current equipment to a leasing company - than lease it back. Not only will you receive some tax benefits - but get the money you need to expand.

           


          There is purchase order financing where you could get funding for a purchase order you have from a creditworthy customer. These companies will either pay you or pay your suppliers.

           


          All the above is based on business assets. There are also unsecured funding but you MUST have excellent credit, good income to repay, and low debt loads.

           


          Just some thoughts

           


          Business Money Today

           

          www.businessmoneytoday.com
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          • Re: whats the best way for an existing manufacturer expand
            bigpayout Newbie
            We may have a solution for getting funds for your business. I need some information, then I can email you what we offer and how it works, without dealing with banks headaches. Are you processing credit cards with a monthly volume of $3,500? How long have you been in business and are you leasing your building?
            Let me know if we can help?

            Thanks,

            Raymont Jones
            U.S. Merchant Systems
            704-779-8885
            rjones107@bellsouth.net
            1 of 1 people found this helpful
              • Re: whats the best way for an existing manufacturer expand
                valintech Newbie

                Thank you those who responded so far,
                I wanted to add some information about our company.
                We manufacture tooling, prototypes, and plastic production in volume.
                So the purchases usually exceed credit card halos and therefore we do not process credit cards, use to but spent more money on merchant services than made from it.
                Our goals are to add some auxillary equipment, staff, inventory of materials on hand and last but not least achieve certifications in the industry (which can run 20-25k plus plus plus).
                The auxillary equipment needed is from many different sources, thus how can I get the funds to cover all the new equipment without creating 10 -20 different leases.
                All the equipment we own outright, and rent a 13000 square foot facility.

                 

                I hope this helps to understand our needs.
                www.valintech.com

                valintech
              • Re: whats the best way for an existing manufacturer expand
                LUCKIEST Guide
                The best way for an existing manufacturer expand

                Tom, If I wanted to raise money to expand I would do TWO things.

                One, I would develop both a Business and Marketing Plan

                Two, I would contact SCORE. SCORE is FREE both in person and on line.

                Good luck, LUCKIEST
                • Re: whats the best way for an existing manufacturer expand
                  Lighthouse24 Ranger

                  It seems (to me) like most private investors are a little too impatient for manufacturing (unless it's high-tech or a promising "green" product), so I'd probably not focus on that.

                  Are you the sole source provider of a product that your clients/customers require, and/or do you hold the patent for any of the processes you utilize? Would your expanded capacity (and the related economies of scale) allow a particular client/customer to significantly increase its business or operation? Is your process management ISO9001-compliant right now in your view (i.e., is the money you're seeking just to fund the site audit and certification process)?

                  Large producers of industrial products with major contracts are sometimes on the lookout for well-managed small shops that can reliably supply them with manufactured components, and will invest in the small firm's expansion (injecting capital, buying and leasing back equipment, etc.) to ensure the long term availability of a key component at a predictable price (and to create a additional revenue stream). For example, a small firm that produces high impact molded cases for control boxes received expansion capital from a security systems manufacturer that it supplied after that systems manufacturer won a contract to have its equipment installed in airports. It had to increase its own output to fulfill the contract (and therefore the output of its key suppliers, as well) -- and in that instance, it made economic sense to help the small firm that made their molded cases expand its production capacity. Perhaps there's a similar link between one of your existing or new/prospective customers and something you produce.

                  If your expansion includes new jobs, you'll also want to check with your state and local economic/business development groups, and your elected city/state representatives. There may be local loan guarantees, grants, or other programs -- especially as new "economic recovery" initiatives are rolled-out, that are designed to target established small firms that would hire more people if they could fund the facilities or equipment for growth. Even if there's nothing right now, explain your situation to them so if/when something appears in a few weeks, you're on their radar.

                  Good luck.
                  1 of 1 people found this helpful