I run a manufacturing business. What are my options for machines, premises and working capital?
Equipment tax write-offs, SBA 504 and MARC lines, industrial revenue bonds, equipment finance and export support, cheapest first.
Manufacturers buy expensive machines and buildings up front, pay for materials and staff while goods are being made, and then wait 30 to 90 days for customers to pay their invoices. Because the business holds real assets, stock and receivables, it has more ways to borrow than a service business, and several federal and state programs have higher limits or special rules for manufacturers.
- Tax write-offs after you buy: under section 179, a profitable business can deduct up to $2,560,000 of the cost of qualifying machinery and equipment in the year it goes into service (for tax years beginning in 2026, reduced dollar for dollar once total qualifying purchases pass $4,090,000). The 2025 budget law (Public Law 119-21) also restored 100% first-year bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, and added an elective 100% allowance for qualified production property placed in service after July 4, 2025. These reduce your tax bill after you buy; they do not provide the cash up front.
- Higher SBA limits and a line of credit for manufacturers: on an SBA 504 loan for buildings or long-life machinery, the SBA-guaranteed debenture can reach $5.5 million (instead of the usual $5 million) for a small manufacturer with all its production facilities in the US, and the job goal is one job created or kept per $150,000 guaranteed rather than $95,000. Under its 7(a) program, the SBA's Manufacturers' Access to Revolving Credit (MARC) offers manufacturers a revolving line of credit of up to $5 million that can revolve for up to 10 years and then be repaid over up to 10 more.
- Tax-exempt industrial revenue bonds: for a larger plant or equipment project, a state or local issuer can sell qualified small issue bonds — up to $1 million an issue, or up to $10 million counting six years of capital spending in the same city or county — and lend the proceeds to a manufacturer at a tax-exempt rate. At least 95% of the proceeds must go on land, buildings or depreciable equipment for a manufacturing facility.
- Borrowing against machines, stock and invoices: an equipment loan or lease spreads the cost of a machine over its working life using the machine itself as security, keeping your bank line free for materials and payroll. Once orders and invoices build up, accounts receivable lines, factoring, inventory lines and full asset-based lending let borrowing grow with production.
22 routes to look at, cheapest first
Compare the first 4 side by side- L0
Free or nearly free
Little or no cash cost, though most take time and admin. Some bring money in, and a few have small fees.- Own cash and no-cost
Supplier trade credit
Your suppliers let you pay for goods or services some time after you receive them, often 30 or 60 days later. Usually free if you pay on time, but giving up an early-payment discount can make it expensive.
Weeks - Grants, tax credits and prizes
Business tax breaks (section 179, bonus depreciation and credits)
Federal tax rules that let you deduct the cost of equipment in the year you buy it, and credits for things like offering staff health insurance. They cut the tax you owe, so they help only if the business has taxable profit or tax to pay, and they come after you have spent the money.
6 months or more - Grants, tax credits and prizes
State export grants (STEP)
Grants from your state's trade office, funded by the SBA's State Trade Expansion Program (STEP), that pay part of the cost of finding customers abroad: trade missions, trade shows, translation, international marketing and export training. They pay for winning export sales, not for making the goods.
Months - Supplier and buyer-led finance
Federal contract financing
Payments a federal agency makes to its contractor before delivery, as costs are incurred or milestones are met, plus the right to assign contract payments to a bank as security. No separate charge, but it has to be in the contract, and it is meant to show up in a lower price.
Weeks
- Own cash and no-cost
- L1
Very cheap or subsidised
Borrowing on better terms than the market, usually because a public body, community lender or large buyer is involved.- Government-backed and community lending
Industrial revenue bonds (small issue bonds)
A state or local issuer sells tax-exempt bonds and lends the money to a manufacturer for a new plant or equipment. Bond buyers pay no federal tax on the interest, so the rate can be lower than a bank loan, but only for manufacturing projects of up to $10 million, and with public approval, legal work and fees.
6 months or moreUp to $10mPersonal guarantee likely - Government-backed and community lending
SBA 504 loans
Long-term, fixed-rate financing for buildings, land and long-life equipment, split between a bank and a nonprofit Certified Development Company backed by the SBA. You usually put in 10% yourself.
MonthsUp to $5.5mPersonal guarantee likely - Supplier and buyer-led finance
Supply chain finance (supplier finance programs)
A large customer sets up a program with a bank or finance company so that you can choose to have its approved invoices paid early, for a charge, instead of waiting until the payment date.
Days
- Government-backed and community lending
- L2
Mainstream secured debt
Standard borrowing from banks, credit unions and mainstream lenders, often secured on assets or backed by a personal guarantee.- Government-backed and community lending
EXIM working capital guarantees and export credit insurance
The Export-Import Bank of the United States (EXIM) guarantees 90% of a bank's working capital loan to an exporter, and insures exporters against foreign customers not paying. Its authority to take on new business ends on December 31, 2026 unless Congress extends it.
Weeks - Government-backed and community lending
SBA 7(a) loans
A business loan of up to $5 million from a bank or other lender, with part of it guaranteed by the SBA, for businesses that cannot get the credit they need on reasonable terms elsewhere.
MonthsUp to $5mPersonal guarantee likely - Government-backed and community lending
SBA export loans
Bank loans and lines of credit of up to $5 million for small businesses that sell outside the US, with the SBA guaranteeing up to 90% so lenders take on export risks they would otherwise turn down.
WeeksUp to $5mPersonal guarantee likely - Government-backed and community lending
SBA Express loans
A loan or line of credit of up to $500,000 from a bank or other lender with SBA Express authority. The lender decides under its own procedures and the SBA guarantees half, so there is less SBA paperwork than a standard 7(a) loan, but the same rate caps and the same rules on who can borrow.
WeeksUp to $500kPersonal guarantee likely - Government-backed and community lending
SBA lines of credit (CAPLines and others)
Bank lines of credit of up to $5 million for working capital, contracts, seasonal peaks or building projects, with the SBA guaranteeing part so lenders will say yes. Rates are capped, but owners usually guarantee the line and the lender watches your receivables and inventory closely.
MonthsUp to $5mPersonal guarantee likely - Bank and mainstream debt
Bank and credit union term loans
A lump sum from a bank or credit union, repaid in fixed installments over an agreed term, usually one to five years. Usually cheaper than online lenders, but slower, and usually secured on assets with a personal guarantee.
WeeksPersonal guarantee likely - Bank and mainstream debt
Business line of credit
A credit limit from a bank, credit union or online lender that you can draw on, repay and draw again, for short-term costs such as inventory, payroll and seasonal gaps.
WeeksPersonal guarantee likely - Bank and mainstream debt
Equipment leasing and sale-leaseback
Paying to use equipment that a lessor owns, with options to buy it at the end, or selling equipment you already own to a lessor and leasing it back to raise cash. Little or no deposit, but you may pay more in total and own nothing at the end.
Weeks - Bank and mainstream debt
Equipment loans and finance agreements
A loan or finance agreement to buy machinery, vehicles or other equipment now and pay for it over time. The equipment itself usually secures the deal, and tax rules can let you write off much of the cost in the first year.
Weeks
- Government-backed and community lending
- L3
Specialist secured debt
Borrowing secured on specific assets such as invoices or inventory, with more fees and conditions than mainstream debt.- Asset-based and specialist lending
Accounts receivable financing
A loan or line of credit secured on your unpaid invoices. The invoices stay yours, you usually keep collecting from your customers, and how much you can borrow rises and falls with what they owe you.
Weeks - Asset-based and specialist lending
Asset-based lending
A revolving credit line secured on your receivables and inventory, where how much you can borrow moves with the value of those assets. Flexible for growing or seasonal businesses, but closely monitored and usually dearer than ordinary bank lending.
Weeks - Asset-based and specialist lending
Inventory and floor plan financing
Loans secured on the goods you hold for sale. Dealers of vehicles, boats, equipment and similar goods use floor plan lines that pay for each item and are repaid as it sells; other businesses borrow a smaller share of their stock's value.
Weeks - Asset-based and specialist lending
Invoice factoring
A finance company (a factor) buys your unpaid invoices to other businesses at a discount, pays you for them before your customers do, and collects the money from your customers.
Days - Asset-based and specialist lending
Purchase order and contract financing
Money to fill a specific order or contract you have won but cannot afford to carry out, repaid when your customer pays. The SBA backs one version through banks; specialist finance companies offer others on their own terms.
WeeksUp to $5mPersonal guarantee likely - Asset-based and specialist lending
Trade finance and letters of credit
Bank tools that make buying from or selling to other countries safer and easier to finance: letters of credit, documentary collections, standby letters of credit and forfaiting. They cost fees, need careful paperwork, and each suits a different level of trust between buyer and seller.
Weeks
- Asset-based and specialist lending
Worth knowing
- Match the term of the finance to the life of what it buys: use equipment finance, an SBA 504 loan or an industrial revenue bond for machines and buildings, and keep your revolving line of credit for materials, work in progress and receivables.
- If you are developing a new product or manufacturing process, check the R&D tax credit and SBIR/STTR research awards as well as the routes below.
- Check whether your business counts as small under the SBA's size standard for your 6-digit NAICS manufacturing code (usually 500 to 1,500 employees).
- If you export goods made in the US, SBA Export Working Capital and Export Express loans and EXIM Bank working capital guarantees can fund export orders and foreign receivables that domestic lenders leave out of your borrowing base.
Sources
- IRS Publication 946: How To Depreciate Property (section 179 limits for 2026, special depreciation under P.L. 119-21) · checked October 20, 2026
- SBA: 504 loans · checked October 17, 2026
- 13 CFR 120.931: 504 lending limits · checked October 17, 2026
- SBA: SOP 50 10 8.1, Lender and Development Company Loan Programs (effective October 1, 2026): Section B, Chapters 3 (MARC) and 4 (CAPLines) · checked October 20, 2026
- 26 U.S.C. 144: qualified small issue bonds (2024 edition) · checked October 20, 2026
- IRS Publication 4078 (Rev. 1-2026): Tax-exempt private activity bonds · checked October 20, 2026
Facts about each route are sourced on its own page.