Most fabricators finance a press brake or a laser with equipment financing secured by the machine, with a term near its working life, and carry material and long receivables on a line of credit. The 2023 County Business Patterns lists 34 fabricated metal manufacturers with employees in Scott County, MN.
The direct answer, county figures, a worked press brake example with invented figures, second-shift planning, receivables, and a checklist.
The Short Answer: The Machine Usually Secures Its Own Financing
A press brake, a fiber laser or a CNC mill is the kind of asset equipment financing was built for: expensive, long-lived and with a resale market. The machine secures the deal, so partners can look past a shop's short history more readily than for an unsecured loan. The quote, the shop's recent statements and the work the machine will do are the core of the request.
Scott County, MN had 34 fabricated metal product manufacturing employer establishments in 2023, with an annual payroll of about $104.2 million; only 12 of the 34 had fewer than five employees (Census County Business Patterns). Manufacturing as a whole paid about $750.4 million in annual payroll in the county, more than any other sector.
Leasing is the other common route. A shop that plans to upgrade every few years may prefer a lease with an upgrade option; one that runs machines for decades usually buys.
Business Loan to Buy Machinery Explained With a Scott County, MN Machine Shop Buying CNC Mills
A business loan to buy machinery such as CNC mills starts from the quote, which should list the machine, control, tooling, installation, rigging and training. Rigging and foundation work can be significant for a heavy machine, and some partners finance them with it.
Illustration only, invented figures: a shop buys a $285,000 press brake, puts $28,500 down and finances $256,500 over 7 years at an annual rate of 8.75%. The payment would be about $4,094 a month, with total interest of about $87,428 (our arithmetic).
The shop would check the payment against the added hours the brake makes billable. A brake that takes over work now sent out to another shop shows that saving directly.
How to Finance a CNC Machine? What Scott County, MN Machine Shops Weigh Before a Second Shift
Financing a CNC machine for a second shift is two requests. The machine fits equipment financing. The second shift itself, with operators hired and trained before the added orders are invoiced, fits working capital sized to the ramp-up weeks.
Partners reading a second-shift request look at backlog: purchase orders, customer forecasts and the shop's current utilization. A shop already running the first shift at capacity has a stronger case than one adding a shift on hope.
Machine shops also buy tooling and programming time for new parts. Those are often operating costs, paid from cash flow, rather than financed with the machine.
Loans for Manufacturing Business When a Shakopee, MN Machine Shop Needs Fiber Lasers
Loans for a manufacturing business adding fiber lasers follow the same pattern as a press brake, with one difference: laser technology moves on in a few years, and resale values can fall further than for a brake. Partners may set a shorter term, and leasing with an upgrade path is more common.
Power and ventilation requirements for a laser can mean electrical work in the building. In Shakopee, that work goes through the city's permit process; see the zoning and permits guide.
Long Receivables: Where It Shows Up in a Machine Shop's Funding File
Long receivables show up in a machine shop's funding file as an accounts receivable aging report. Customers on net-45 or net-60 terms mean the shop carries the material, labor and machine time for every order for six to eight weeks or more after the work ships.
A business line of credit sized to the typical receivables balance carries that gap. Partners read the customers as much as the shop: a few large, reliable customers read differently from many small ones.
A term loan fits a different need: buying a second building, buying out a partner or buying a competitor.
A Fabricator's Checklist Before Requesting Machine Financing
Before requesting machine financing, a fabricator can gather:
- The machine quote with installation, rigging and tooling listed
- Twelve months of bank statements
- The accounts receivable aging report
- Backlog or purchase orders the machine will serve
- Existing equipment loans and leases
Call (612) 608-4508 with the quote. See machine shop loans and the Shakopee, MN page for more.
By Wheatvale Lenders · Updated
