Manufacturing equipment financing

Manufacturing equipment is bought in a way most equipment isn't: a machine is ordered months before it arrives, it has to be rigged and installed before it makes a part, and the tooling, software and training that make it productive can add a third to the price. iFinancial Group finances all of it on one approval, new or used, on a one-page application. No tax returns and no audited financial statements to apply, no minimum and up to $1,000,000.

Who you're dealing with

iFinancial Group has funded equipment since 1997, roughly $600 million of it, in all 50 states. We're a direct lender, not a broker, so the file is underwritten in house and not shopped around. Our customers have ranged from independent manufacturers to global technology companies. We've barely advertised in almost three decades. The business came from repeat customers, referrals, and vendors sending us their customers.

The machine is only part of the cost

A machining center that lists at $180,000 lands on the shop floor at closer to $230,000 once it's rigged, leveled, wired, tooled and the operators are trained. Tooling and fixtures are financed as part of the equipment. Rigging, installation, software and training are soft costs, and they ride on the same deal, on many deals up to 30% of the total. One financing for what it takes to make the first good part, rather than a loan for the machine and a cash bill for everything around it.

A multi-machine cell, a laser with its automation tower, or a molding machine with the robot and the auxiliary equipment around it goes on one approval as one piece of equipment, even when the pieces come from different vendors.

Lead times and deposits

New production equipment is often built to order or allocated from a builder's schedule, and the vendor wants a deposit at order, sometimes 20 to 50 percent. On qualifying transactions iFinancial Group can pay the vendor at order rather than only at delivery, so the deposit is part of the financing instead of coming out of the shop's cash. How much is prefunded at order depends on the vendor's terms and the file. An approval holds up to 60 days.

A machine that ships in six months can also start paying when it starts running: a deferred first payment, typically up to 90 days, covers the install and the ramp.

New, used and rebuilt

Used machine tools trade through dealers, auctions of closed plants and between shops directly, and we finance all three. A well-maintained used machine is often the faster and better buy for a job shop, and a rebuilt or retrofitted machine with a new control is a normal purchase. The invoice, the serial number, and on a private sale a lien search and proof of payment are what the review works from.

Manufacturing equipment carries no title. The lender's claim is a UCC filing against the machine by serial number, which is released when the last payment is made. It covers the machine, not the rest of the shop.

Section 179 and the year-end order

Production equipment generally qualifies for the Section 179 deduction in the year it's placed in service, which is why so much of it gets ordered in the fourth quarter. A machine has to be in service, not just ordered, by year end to count, so lead time matters as much as price. Confirm the treatment of your own purchase with your tax advisor.

Equipment covered

How it works with iFinancial Group

It's the same one-page application whether the equipment is small or the deal runs to $1,000,000: no tax returns and no audited financial statements to apply, no minimum and up to $1,000,000. Decisions typically come back within 24 hours, and an approval holds up to 60 days. New and used equipment, terms up to 84 months, and soft costs up to 30% so freight, setup and training can go in the same deal. Payment structures beyond level payments are there when the equipment earns unevenly. We've been doing this since 1997, in all 50 states.