Manufacturing has long been the backbone of the American economy. From precision machining for aerospace to drilling and excavation for energy, manufacturers provide the essential goods and services that power national growth. But despite their importance, manufacturers often face steep hurdles when it comes to securing financing.

The Financing Challenges Manufacturers Face

• Capital-Intensive Operations with Thin Margins - Manufacturing demands significant upfront spending on machinery, tooling, inventory, and maintenance. Yet revenues often lag due to project delays, extended receivables, or fluctuating demand. The result is persistent pressure on cash flow and consistently slim operating margins

• Limited Bank Appetite During Industry Volatility - When economic conditions shift or industries enter a downturn, banks frequently pull back—reducing credit lines, tightening covenants, or declining new loans. For manufacturers navigating volatility, this retreat can occur at the exact moment when capital is most critical.

• Collateral and Covenant Roadblocks - Traditional lenders require strong balance sheets, pristine collateral, and strict covenant compliance. Manufacturers in transition—whether recovering from disruption, scaling for growth, or rightsizing operations—often struggle to meet those benchmarks, even when the long-term fundamentals of the business remain sound.

• Time-Sensitive Capital - Needs Opportunities in manufacturing rarely wait. Winning a contract, upgrading equipment, or acquiring a facility often requires rapid financing. Yet bank underwriting is typically a slow process, creating a mismatch between when capital is available and when it is truly needed.

Alternative Financing Through Private Credit

To overcome these challenges, many manufacturers are turning to private credit lenders that focus on real estate–backed financing. Because owner-occupied facilities are often a company’s most valuable asset, leveraging that equity can unlock much-needed liquidity even when traditional credit is unavailable. Benefits of this approach include:

• Unlocking Real Estate Equity – Facilities serve as collateral for significant funding, often in the $1–5 million range.

• Flexible Structures – Interest-only payments, 24–36 month terms, and no covenants provide breathing room to reinvest and stabilize.

• Bridge to Bankability – These solutions are temporary by design, helping firms regain strength until they qualify again for conventional or SBA financing.

• Speed to Funding – Private credit lenders can often fund in weeks, preserving momentum at pivotal moments.

Real Stories from Flatbay Capital

Three recent examples from Flatbay Capital, a private credit firm headquartered in Texas, illustrate how real estate–backed financing can support manufacturers during periods of transition:

• Aerospace Machine Shop – When a Houston-based, women-owned aerospace machine shop faced financial headwinds, its existing bank declined to refinance its debt. A $2.3 million bridge loan, secured by its operating headquarters, refinanced the prior bank note and supplied additional liquidity for working capital.

• Drilling & Excavation Manufacturer – Rising labor costs forced a global manufacturer to consolidate U.S. operations. A $1.4 million CRE line of credit allowed the firm to acquire a smaller facility while preserving working capital for the transition.

• Vacuum Truck Fabricator – After a natural disaster destroyed its headquarters and post-COVID supply chain issues compounded the disruption, the company faced mounting debt and strained bank relationships. To get the liquidity to recover, a $3 million CRE loan was used to refinance obligations and inject working capital.

The Takeaway

Manufacturers cannot afford delays in production or workforce disruption. Access to capital—delivered at the right time and under workable terms—is essential to keeping America’s industrial engine running. Private credit financing has proven to be an important bridge, ensuring manufacturers can remain resilient while preparing to return to traditional bankability.