Industry guide

Machine shops: how the money moves, and what funding fits.

The cash-flow picture, the calendar of pressure points, and the right funding page for the problem in front of you.

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How money moves in a machine shop

At Merchant Fund Express, this guide sets out how the money moves in machine shops, when cash gets tight and which funding structures tend to fit each need.

The pressure point for a machine shop is rarely profit; it is the order in which cash arrives and leaves. Reading the two sides of that equation is the first step in choosing the right capital.

Money arrivesPurchase-order work billed on completion, with customers paying on 30 to 60-day terms.

Bills go outRaw material, tooling and labour are paid before parts ship and invoices are paid.

When cash gets tight

Tied to customers’ production cycles, so lumpy rather than seasonal.

Fit the product to the problem, not the other way round. Here is the usual pattern of pressure for a machine shop:

Before the busy stretch: line up a CNC machine, press or tooling and the staffing the demand will need.

Through the middle: Concentration in one customer whose orders pause.

After the peak: fixed costs keep running while sales settle, so the balance of the year is funded from the peak or from a line.

What a machine shop usually needs capital for

These are the needs we see most often, with the structure that tends to fit each one.

A CNC machine, press or tooling

Usually fits: equipment financing.

Material for a large purchase order

Usually fits: a working-capital advance or line of credit.

A second shift or building expansion

Usually fits: a term loan.

What underwriters read on a machine shop bank statement

Underwriting for revenue-based business funding reads bank activity: deposits, average daily balance, negative days and any open advances. For a machine shop, the lines that matter are:

A few larger customer payments with long cycles

Material and tooling debits ahead of deposits

A flat, steady balance rather than a swing to zero between deposits

The usual trap: concentration in one customer whose orders pause. If this is your situation, say so on the application; it is better read as context than discovered as a surprise. See the published requirements for the exact thresholds. The minimum FICO is 500, and the better your credit, the better your offer.

A worked example (illustrative arithmetic only)

Take a machine shop with about $140,000 in monthly revenue asking for $90,000. These figures are an illustration of how the published terms work, not an offer; your offer shows the actual amount, schedule and total cost before you sign.

Illustration	Figure
Request	$90,000
Monthly revenue assumed	$140,000
Line of credit: 2.49% fee on a single draw of that size	$2,241
Term loan cap: 15% of annual revenue	$252,000 (this request fits under it)
Merchant cash advance at an example 1.30 factor: total payback	$117,000
… spread over about 26 weeks: weekly remittance	$4,500
… or about 126 business days: daily remittance	$929

Compare any offer on total dollars repaid and on the rhythm of payments, not on a single rate. See the factor-rate calculator to run your own numbers.

Pick the page that matches your problem

Every page below is written for machine shops. Start with the problem you have this month.

By product

Merchant cash advance for machine shops — A lump sum repaid from future revenue; the fastest route when timing is the problem.

Business line of credit for machine shops — Draw when you need it, repay, and draw again; interest only on what you use.

Working capital for machine shops — Day-to-day cash for payroll, suppliers and the gaps between invoices and deposits.

Revenue-based financing for machine shops — Payments that flex with sales, so a slow week is not a missed payment.

Equipment financing for machine shops — Buy or replace the machine that earns its keep, with the asset behind the deal.

Bad-credit business loans for machine shops — How files with a weak score are read, and what offsets it.

Same-day funding for machine shops — What same-day decision and next-business-day funding mean in practice.

Line of credit vs merchant cash advance for machine shops — A side-by-side for this industry when you are choosing between the two.

By situation

Payroll funding for machine shops — Cover wages while deposits catch up.

Inventory funding for machine shops — Stock up before the demand arrives.

Expansion funding for machine shops — A second location, crew or line of business.

Equipment repair funding for machine shops — Fix the machine that is costing you every day it is down.

Emergency funding for machine shops — Money fast when something breaks or a bill lands.

Slow-season funding for machine shops — Bridge the quiet months without cutting staff.

Big-contract funding for machine shops — Fund the work before the first invoice is paid.

Cash-flow guide for machine shops — How cash actually moves in this business.

Eligibility and the basics

Does a machine shop qualify? — Eligibility, how files line up, and a worked example.

Machine shops funding by state and city — The same industry, state by state.

Do you fund machine shops? — The short answer.

What credit score do machine shops need? — The short answer on credit.

Common questions

Are machine shops eligible for funding?

Yes. Machine shops are an eligible industry. Sole proprietors can apply, the minimum FICO is 500, and the better your credit, the better your offer. Details are on the machine shop qualification page. Merchant Fund Express shows the exact amount, schedule and total cost in your offer before you sign.

How fast can a machine shop be funded?

A person reviews your revenue, time in business and bank activity, and a decision is typically same day. Approved files are usually funded the next business day. Merchant Fund Express publishes its terms and thresholds before you apply.

Which product usually fits a machine shop?

It depends on the need. For a cnc machine, press or tooling, equipment financing tends to fit; for material for a large purchase order, a working-capital advance or line of credit. The structure follows the problem, so start from what the money is for.

What do you look at on a machine shop bank statement?

Deposits and their consistency, average daily balance, negative days and NSFs, and any open advances. A few larger customer payments with long cycles.