Manufacturing financing in Lawrenceburg, TN can cover three different plant costs: an inspection machine a new customer requires, several smaller shop machines bought at once, and the longer wait for cash when a customer moves to net-60 terms. Each fits a different product. Independent funding partners review each request Wrenway Funding passes along and decide on any offer.
A required inspection machine fits an equipment loan with a term chosen against the contract; three small machines can share one loan; longer customer terms fit a credit line sized to the extra month of invoices.
Fabricated metal shops inside Lawrence County, TN manufacturing: the 2023 counts
County Business Patterns put 2,126 paid employees at Lawrence County, TN's 57 manufacturing employer establishments in 2023. Fabricated metal product manufacturing, which includes machine shops, accounted for 12 of those establishments and 431 employees, with $19.7 million in annual payroll. Just three of those 12 shops had a staff under five.
By physical address, ZIP 38464 held 11 fabricated metal product manufacturing establishments in 2023 (ZIP Code Business Patterns). The cases below follow a shop of that kind; the manufacturing industry page covers the sector as a whole.
Manufacturing equipment financing for a coordinate measuring machine a new customer requires: matching the term to the machine or to the contract
A new customer can require a coordinate measuring machine, a CMM, so that parts are checked against the drawing before they ship. The machine is equipment the shop keeps after the contract ends, which shapes the choice of term.
Illustration only, invented figures: a Lawrenceburg, TN machine shop wins a three-year contract that requires a $68,400 CMM. Set to the machine, a 60-month equipment loan at 10.15% a year costs $1,458.35 a month. Matched to the contract, 36 months at the same rate costs $2,211.90.
In this invented case the 36-month term raises the payment by $753.55 a month and cuts the interest by $7,872.60, and the machine is paid off when the contract ends. The 60-month term keeps the payment lower but runs two years past the contract, so the shop would need other work for the CMM by then. For a general look at how loans, equipment finance agreements and leases differ, see the equipment financing page.
A bandsaw, a drill press and a parts washer: manufacturing financing on one loan instead of three in Lawrenceburg, TN
Shops also buy smaller machines in groups: a horizontal bandsaw, a drill press and a parts washer, each from a different vendor. Three separate requests mean three sets of papers; one request with three quotes can put them on a single note.
Illustration only, invented figures: the three machines cost $9,870, $6,240 and $4,310, or $20,420 together. Rolled into a single note at 11.05% a year for 48 months, the group costs $528.26 a month. Three separate loans at that rate and term would come to $528.27 a month combined.
So the arithmetic barely moves; the paperwork does. One note means one payment date and one filing. A term loan is the other route when the group includes items that are not machines, such as tooling or shelving. A funding partner decides what one loan can include.
Net-30 becomes net-60: a credit line for a Lawrenceburg, TN plant's longer receivables
When a large customer moves its payment terms from net-30 to net-60, the plant waits one more month for every invoice. Materials and payroll keep their dates, so the plant carries an extra month of invoices.
Illustration only, invented figures: a Lawrence County, TN plant invoices this customer $46,200 a month. The move to net-60 leaves one more month, $46,200, outstanding at any time. Carried on a line at 11.8% a year, that month costs $448.08 in interest per 30 days (simple daily interest, our arithmetic), or $5,451.60 if the full amount stays drawn all year.
A line of credit fits because the balance follows the invoices up and down. The figure gives the plant a number to weigh against the margin on the contract. More posts are on the blog.
By Wrenway Funding · Updated
