Business loans for manufacturers
HomeSec lends to manufacturers against equity in real property — a factory, a yard or a director's home — from $20,000 to $5,000,000. No financial statements, no valuation and no serviceability test, funded in as little as 24 hours, which fits an industry that buys raw materials months before it invoices.
See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.
See if you qualifyThe cash cycle you are actually borrowing against
A manufacturer carries the longest working-capital cycle of any business that is not a farm. Raw material is bought and paid for, often with a deposit and often from overseas. It sits as inventory while it is machined, fabricated or assembled. It becomes work in progress, then finished goods, then a delivery, then an invoice, and then thirty to sixty days of customer terms. Money leaves the business at the start of that chain and returns at the end of it, and on a large order the chain can run for a quarter or more.
Input prices move independently of the contract. Steel, aluminium, resin, timber and freight can all reprice between the quote and the production run, and a fixed-price order signed in March is exposed to what those inputs cost in June. Energy is now a material line in its own right for anyone running a furnace, a press or a paint line.
Plant is the other distinctive feature. Manufacturing equipment is expensive, specific and often imported, and a machine that is central to a line cannot be worked around. Tooling for a new product is paid for before the first unit exists. Neither is a cost that can be timed to suit the cash position.
What makes the phone ring
| The event | What it looks like |
|---|---|
| A large order that has to be built before it is paid | Materials, labour and machine time for a quarter, against an invoice that falls due after delivery. |
| A raw material price or availability window | Buying a run of steel or resin at today's price, or securing supply before a lead time stretches. |
| Machine failure or replacement | A press, a CNC, a furnace or a line component that stops production until it is fixed. |
| Tooling for a new product or customer | Paid up front, recovered over a production run that has not started. |
| An ATO balance built on payroll | A factory wage bill makes PAYG withholding and superannuation large, and both accrue on cash that is tied up in inventory. |
| A customer that has failed or stretched its terms | Concentration is normal in manufacturing, and one customer moving from 30 days to 60 can consume a quarter's profit. |
What you can offer as security
Many manufacturers own their factory, which is the strongest security we see: industrial property is straightforward to assess and to sell, and it is assessed to 70% of value as commercial security. A first or second mortgage over it will usually carry the amount on its own.
Where the factory is leased, the security is generally the director's home or an investment property, assessed to 80% of value. More than one property can be combined on a single loan, and the borrower does not have to be the owner of the security.
Plant and equipment is not what we lend against. Most of it already carries a chattel mortgage or an equipment finance agreement, and a specialised machine has a narrow resale market. Real property is what supports the loan.
How much you can borrow
Take the property's value, multiply by 80% for residential security or 70% for commercial, and subtract what is already owing on it. What is left is roughly what is available, between $20,000 and $5,000,000. Several properties can be added together, and the borrower does not have to be the owner — companies, trusts and sole traders — including start-ups, with everyone on title signing. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.
Why the bank is slow here, and we are not
A bank assessing a manufacturer counts the existing equipment finance book in full against serviceability, reads inventory and work in progress as risk rather than as value, and takes weeks to work through two years of accounts in an industry where margins are visibly compressing.
It will also want a valuation on an industrial property, which adds a fee and a week or more, and industrial valuations are among the slowest to arrange outside a capital city.
We do not order valuations and we do not run a serviceability test. The equity in the property and the order, contract or refinance that repays the loan are what we assess, and a Lending Manager gives an indicative answer on the first call.
What the money is used for
- Funding a large order to completion. Materials, labour and machine time through the production cycle.
- Raw material purchase. Buying at a price or securing supply ahead of a lead time.
- Machine repair or replacement. Where downtime costs more each day than the finance does.
- Tooling and new product set-up. Paid before the first unit, recovered across the run.
- Clearing an ATO or superannuation balance. Paid direct from settlement, which removes the personal exposure a director carries on both.
- Buying the factory. A first mortgage over industrial premises the business currently rents.
From the call to the money
Tell us the deal
Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.
Minutes
Conditional approval
Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.
About 15 minutes
Funds released
As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.
As little as 24 hours
What it costs
Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.
Questions we get from this industry
Can I borrow against my factory?
We lease the factory. Is there anything else we can use?
Does our existing equipment finance reduce what we can borrow?
Can we fund a purchase order or a contract?
How long can we hold the loan?
Do you lend on rural or regional industrial property?
We import raw materials and the dollar has moved against us. Does that matter to the assessment?
Is there a minimum trading period?
Not a call centre. Tell us the property, the amount and what the money is for, and you will have an indicative answer on the call. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
The assessment is the same in every one of them: property, purpose and exit.
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Reviewed by Matt Hempel, National Credit Manager