Invoice Factoring for Machine Shops

Machine shops cut, fabricate, and finish instruments, tools, and parts used in every industry. A lot of pressure is often placed on the shops to complete an order on short notice, and this might require staff to work overtime, which becomes problematic when the monthly budget is insufficient. 

Are you struggling to meet your short-term funding needs? Do you have established clients, but your cash flow is affected because they pay 30, 60, or even 90 days after receiving your invoice? Factoring is a reputable business funding alternative. Sell your accounts receivable to an invoice factoring company, and they will provide you with an instant advance on the invoice balance. 

Factoring companies pay a large percentage of your invoice upfront, and it is debt-free because you are simply getting an advance on money already owed to you for work you’ve completed. The factor will handle collections, and your clients will settle their outstanding balances with the factoring company.

Streamlining Finances in Machine Shops with Invoice Factoring

As a business owner in the manufacturing industry, particularly in sectors like machine shops, managing cash flow is a critical challenge. Invoice factoring services offer a viable solution to this problem. Unlike traditional bank loans that rely heavily on your credit history and can lead to increased debt, invoice factoring for machine shops provides immediate cash based on the creditworthiness of your slow-paying customers. This financing solution is ideal for machine shop businesses dealing with unpaid invoices and urgent cash flow needs, such as payroll or purchasing new equipment like CNC machines.

Factoring companies, specializing in sectors like machine shops and manufacturing factoring, understand the unique challenges you face. They provide a percentage of your invoice as a cash advance within a short approval process, ensuring that your business has the funds to run smoothly and handle new orders efficiently. This is especially crucial for small businesses in the manufacturing industry, where delays in payment can significantly hinder business operations.

Moreover, factoring is not a loan; it’s an advance on accounts receivable, enabling your business to access working capital without incurring bad debt. This alternative funding option can be particularly beneficial for new businesses or those without a strong credit history. Factoring for manufacturing companies like yours not only assists in maintaining a healthy cash flow but also helps you grow and succeed in competitive sectors such as aerospace, where timely delivery and maintaining quality standards are paramount.

Considering invoice factoring can be the key to overcoming cash flow issues often faced by many machine shops. With the right factoring company, you can ensure that your machine shop company has the additional funding needed to thrive. Contact us today to find the best invoice factoring services tailored to your machine shop business, and let us help you navigate your financial obligations with ease.

Machine Shop Factoring vs. Bank Loans

Traditional bank loans are approved based on the operational and credit history of your machine shop company. If the loan is approved, your company incurs debt that must be repaid with interest over a specific period. Factoring provides funding based on the credit strength of your clients. You incur no debt and pay no interest.

Top Challenges in the Machine Shop Industry

  • Machines break down. Machines tend to break down when jobs are queued with strict deadlines, which could result in losing the contract or expensive machine repairs.   
  • Keeping on schedule. Schedules go off track when clients change the design or quantity of their order on short notice or machines break down.  
  • Reducing delivery time. Design, programming, inventory control, personnel, and automation play a role in reducing delivery time. Keeping up with the latest design software can require funds not budgeted for. 
Machine Shop Factoring

How to Run a Successful Machine Shop

Know how to use your machines, look after your tools by keeping them clean, and they will work for a long time. Be willing to work weekends or evenings for difficult parts orders bigger establishments cannot respond to immediately. When you are ready to expand, a factoring company can provide funding as soon as an agreement is reached.

Financing Options for Machine Shops

  • Equipment vendor financing. Use financing provided by the equipment vendor if you prefer staying up to date with the latest fabricating technology and want a longer warranty. 
  • Specialty Finance Companies (SFCs). Available for newer businesses and those facing an uncertain future. Stiff repayment penalties are charged.  
  • Invoice factoring. The size of your machine shop is irrelevant with invoice factoring services, only the creditworthiness of your customers. Invoice factoring fast-tracks the income tied to slow-paying customers. The factoring company advances the largest portion of your invoice upfront once its verification process is completed and holds the invoice as collateral. Once the debtor pays the invoice in full, the amount held in reserve is paid to you, excluding the factoring company service fee.

Considering invoice factoring for your machine shop? Request business? Contact us to request a machine shop factoring quote today.

Get an instant factoring estimate

Factoring results estimation is based on the total dollar value of your invoices.
The actual rates may differ.


You can reach us at

Get an instant factoring estimate

Factoring results estimation is based on the total dollar value of your invoices.
The actual rates may differ.


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