Manufacturing Business Loans

Delays and expenses may lead to unpredictable cash flow for manufacturers

Manufacturing businesses contribute approximately 11% to the U.S. GDP and employ roughly 12 million people. But they face a range of financial challenges that can make growth challenging. One of the biggest hurdles? Rising costs. Many manufacturers have reported that raw material costs surged by 6%, and labor shortages have pushed wages up by nearly 5%. Energy prices have also risen with natural gas prices increasing, impacting manufacturing facilities dependent on energy-intensive processes.

Manufacturers must also invest in advanced machinery, automation, and software systems to stay competitive. These upgrades can be expensive—industrial robots, for example, cost anywhere from $50,000 to $150,000 each. Small to mid-sized manufacturers often struggle to find the capital needed for these critical improvements. Without the right technology, businesses risk falling behind competitors who are making investments in automation.

Manufactures also face supply chain issues, with nearly 75% of manufacturers reporting supply chain delays. These disruptions, combined with rising transportation costs, make it hard for businesses to maintain a stable cash flow. In fact, a survey found that 68% of manufacturers experienced a decline in revenue due to supply chain disruptions, illustrating just how significant this challenge can be.