A Marysville, OH supplier shop can finance a CNC lathe or a press with an equipment loan secured by the machine, put tooling, rigging and setup on a term loan, and carry the wages for a new part number with working capital until the first invoices are paid. A funding partner reads the quote, the customer's purchase order and the bank statements, then sets any terms.
The machine can secure its own equipment loan. Tooling, rigging and setup leave little to resell, so a term loan with a shorter term fits them. Wages for a new part number go out before the first customer payment, a working capital question. Electrical service, foundations and pits are building work outside this site.
CNC lathes, presses and inspection gear in supplier shops
A shop that makes parts for other manufacturers buys machines to hold a tolerance on a given part: a CNC lathe or turning center, a mechanical or servo press, and the inspection gear that proves each part is right, from a coordinate measuring machine down to height and thread gauges. Each of these is equipment with a serial number and a buyer market for used units, which is what makes it workable as collateral.
A quote for that kind of purchase can carry more than the machine. Lines worth keeping apart on it:
- The machine itself, with model, serial number or build slot, and delivery date
- Chucks, collets, a bar feeder or die sets sold with it
- Rigging, setting and leveling the machine on the shop floor
- Operator training and the first service visit
- Programming software or post-processor licenses
An electrical service upgrade, a new foundation or a pit for a press is building work; it stays outside this site even when the machine cannot run without it.
Union County, OH manufacturing (NAICS 31-33) had 7,426 paid employees in the pay period that included March 12, 2023, the highest count of any sector in the county's 2023 County Business Patterns sector table, by our reading of it. The manufacturing industry page compares a used CNC machine with a new one.
Equipment loan for the machine, term loan for tooling and install
Splitting the request follows what each cost leaves behind. The lathe stays on the floor for years and can secure an equipment loan on its own. Tooling wears out, rigging leaves nothing to resell, and training is spent the day it happens, so those costs fit a business term loan with a shorter term.
Illustration only, invented figures: a shop buys a CNC lathe at $139,500 with 10% down ($13,950) and finances $125,550 over 60 months at 9.7%. Tooling, a bar feeder and chucks add $18,700, and rigging and leveling $6,200; that $24,900 goes on a 36-month term loan at 12.3%.
| Agreement | Amount | Term | Rate per year (invented) | Monthly payment |
|---|---|---|---|---|
| Equipment loan: the lathe | $125,550 | 60 months | 9.7% | $2,649.07 |
| Term loan: tooling, rigging, leveling | $24,900 | 36 months | 12.3% | $830.61 |
| Both agreements | $150,450 | n/a | n/a | $3,479.68 |
In this example the two payments run $3,479.68 a month together for the first 36 months, and only the lathe payment of $2,649.07 is left once the term loan ends.
Payroll while a new part number ramps up
A new part number brings wages before revenue. Operators are hired and trained, first articles are run and inspected, and the customer pays on its own terms only after parts ship.
Illustration only, invented figures: a shop adds 3 operators at $21.75 an hour on 40-hour weeks from week 1, a weekly wage line of $2,610. The first shipment goes out on the last day of week 6, and the customer pays 45 days after each shipment, so the first payment arrives in week 13.
In this example, 12 weeks of the added wages ($31,320) plus $9,450 of bar stock for the first runs put $40,770 out the door before any of that part's revenue comes in. That gap is what a working capital loan is for: a set amount, repaid over a fixed term, sized to the ramp rather than to the whole contract.
Ramps slip. A first article that fails inspection, a late bar-stock delivery or a customer that pushes back its first release date moves the first payment later while the wages keep going out. Sizing the request with a few weeks of slack, and keeping the release schedule in the file, lets the partner see the same timeline the shop is planning around. Weeks nobody planned for are what a separate credit line, kept beside the loan, can absorb.
For the office ZIP, the 2023 ZIP Code Business Patterns put 20.7% of the 29 manufacturing establishments in ZIP 43040 under five employees.
Quotes, purchase orders and customer contracts in the file
A funding partner looking at a supplier's machine request can ask what work the machine is bought for. The papers that answer it:
- The vendor quote, with model, options and the promised delivery date
- The customer's purchase order or supply agreement for the part, with quantities and piece price
- A release schedule showing when parts are due to ship
- An accounts receivable aging report, so the partner can see how that customer pays now
- Statements for the operating account that the customer payments land in
A customer contract does not stand in for the shop's own records, but it shows the machine has work waiting. The net-60 invoices article covers the payment side of the same work, and the articles page lists the others.
By Reedshore Credit · Updated
