Industry guide
Manufacturing and Fabrication Financing: Machinery, Facilities and Working Capital
Short answer
Small manufacturers commonly finance machinery with equipment loans or SBA 504, facilities with commercial mortgages or 504, and raw materials and receivables with asset-based lines of credit. SBA's Manufacturers' Access to Revolving Credit (MARC) program offers revolving lines of up to $5 million to eligible manufacturers.
Key points
- Long-life machinery fits long-term financing such as SBA 504.
- Receivables and inventory can support an asset-based line.
- SBA's MARC program is a 7(a) revolving option aimed at manufacturers.
- Since July 2026, small manufacturers can use an unlimited number of 504 loans for distinct projects, within program rules.
Manufacturing ties up capital in three places at once: machines, buildings, and the raw materials and receivables that flow between them.
Typical capital needs
- Machinery and tooling, often with long useful lives.
- Facilities: buying, expanding or improving a plant.
- Working capital: raw materials, work in process and receivables from customers on 30-to-60-day terms.
Common financing tools
| Need | Typical tool |
|---|---|
| Machinery | Equipment loan or lease; SBA 504 for equipment with 10+ years of remaining life |
| Plant purchase or expansion | Commercial mortgage, SBA 504, SBA 7(a) |
| Raw materials and receivables | Asset-based line of credit; SBA MARC |
| Large orders | Purchase order financing; SBA CAPLines contract line |
SBA MARC. SBA's lender table lists the Manufacturers' Access to Revolving Credit program at up to $5 million, with an 85% guaranty up to $150,000 and 75% above, and revolving loans of up to 20 years (10 revolving, 10 term), secured by a lien on business assets other than vehicles and trading assets.
504 for manufacturers. SBA's July 2026 announcement says small manufacturers can secure an unlimited number of 504 loans, as long as each is tied to a distinct project.
What lenders look at
Gross margins, capacity utilization, customer concentration, backlog, the condition and appraised value of equipment, inventory reporting and the quality of receivables. Asset-based lenders will want regular borrowing base reports.
Watch-outs
- Customer concentration: one buyer making up most of revenue worries every lender.
- Financing long-life machinery on short-term money.
- Blanket liens that make it hard to add equipment financing later.
Sources
- SBA: Types of 7(a) loans (MARC)
- SBA: 504 loans (machinery with 10+ years of useful life)
- SBA news release, July 7, 2026 (manufacturers and 504)
Checked November 9, 2026. Program rules and scoring models change; the source is the authority.