Manufacturing Profits with a Short Term Loan
Short Term Loan Manufacturing Profits with a Short Term Loan
Author: Casey Marie Long
Date posted: 07.02.24

A clothing manufacturing company located in Ohio found themselves facing a dilemma. They had been producing the same uniforms for local schools, sports teams, and businesses for over a century. However, the received a very large order for custom shirts for a large corporation wanting to hand out swag to their employees. The order had a very short turn around time of three weeks that was going to waylay their other production for that entire production period.

The manufacturing company had a chance to boost their profits, but they faced a big problem. They got a big order that needed special fabrics and threads, but they had to buy them quickly, even if it cost more money. Even though the order would make them a lot of profit, they wouldn’t get paid until they delivered it, except for a small upfront deposit. Sadly, the company didn’t have enough money to cover the extra costs for supplies and overtime hours to finish the order successfully.

One solution that could save the day was getting a short-term loan. This would give them the money they needed to handle the upfront expenses, make sure they delivered on time, and make the most of their manufacturing profits. Getting manufacturing profits with a short-term loan might just be the key to thriving in a competitive market.

Manufacturing Profits with a Short Term Loan

The manufacturing equipment already had loans against it, so it couldn’t serve as collateral for any additional loans. The company chose to finance the order through an unsecured short-term loan. They successfully secured a $900,000 short-term loan. This was achieved after providing the required tax returns and several months of bank statements to verify their revenue. Once they applied for the loan, they received the funds in their bank account within two days, thanks to the quick underwriting process. Despite the higher interest rate on the loan compared to their equipment financing, they found the additional expense worthwhile. This decision was due to the profitability of the order at stake.

 

Once they received the funds, they were able to pay their suppliers and obtain the materials necessary for production. When the next payroll came around, the company was able to pay its employees for all their regular and overtime. The flexible loan terms allowed them to use the funds for equipment repairs. This happened when one of their production machines broke down.

 

Thanks to the funds available from the unsecured short-term loan, the company completed the order on time and on budget. Afterward, they actively sought out additional contracts with corporate clients to create custom shirts. They discovered a great demand for such products. This was especially true when a company that could meet quick turnaround times produced them.

 

Manufacturing Profits with a Short Term Loan
About The Author | Casey Marie Long

Casey has 12 years of technical writing experience. She is also a CPA and bookkeeper. Casey graduated from the University of St. Thomas (Minnesota) with a B.A. in mathematics and currently resides in San Diego, CA.

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