Skip to main content Skip to main content

Phishing Scam Alert: Do NOT share your credentials. Texas Gulf Bank will NEVER ask for your Online Password or Text Code

Grow Your Fabrication/Machine Shop Through Industrial Machinery Financing

December 19, 2022

Fabrication and machine shops play a vital role in the economy by providing custom parts and components for various industries, especially within the oil and gas industry. Unfortunately, shop owners may face operational and financing challenges from outdated equipment or payment delays, which can negatively impact cash flow.

To resolve these issues, industrial machinery financing provides the funds needed to acquire better equipment, improve operational efficiency, and strengthen company finances.

Discover how to grow your fabrication or machine shop with industrial machinery financing for new and used equipment purchases. We’ll also dive into the overall loan application process.

How Better Machinery Can Help Your Business

We recognize that fabrication and machine shops often face the dilemma of receiving production or manufacturing orders requiring the immediate purchase of expensive materials, then potentially waiting weeks or even months to receive payment for those same orders.

In the meantime, payroll, taxes, rent, utilities, and supplier invoices are all still due, which can strain cash flow and limit the working capital available for equipment investments or replacements.

In order for your shop business to remain competitive, productive, and efficient, you need better machines that are able to meet current needs and offer the capability to scale upwards as your company grows.

Interested in a complimentary
consultation with one of our bankers?

When Is It Time to Invest in New Industrial Machinery?

It may be time to upgrade machinery if you are experiencing a significant increase in customers, plan to expand your services, need to begin large-scale projects, or must replace broken or outdated equipment.

Investing in industrial equipment may provide several distinct benefits for your business, including:

  • More efficient production
  • Better accuracy for reduced waste
  • Expansion of services and manufacturing capabilities
  • Increased product durability
  • Improved cash flow
  • Strengthened buying power
  • Enhanced worker safety

Unfortunately, buying used or new machinery with your cash reserves might negatively impact your immediate cash flow. It could make it harder to cover daily operating costs. Instead, you can finance the purchase of more efficient and productive equipment to help strengthen your fabrication or machine shop business and create more growth opportunities. 

The Basics of Industrial Machinery Financing

Machinery financing is a business loan that enables your company to purchase used or new industrial equipment, which preserves your working capital for other business-critical functions and daily operations.

These business loans offer fixed interest rates and manageable payments spread out over time in an effort to minimize the impact on your business finances. With this financing solution, your shop has the ability to purchase all types of equipment, such as:

  • Metal fabrication machines
  • Welding equipment
  • CNC machines
  • Lathes and grinders
  • Injection molding machines
  • Plasma and laser cutters
  • Forklifts

You will also need to weigh the importance of whether to choose newer machinery with the latest technology or slightly used equipment that comes at a lower price. New machines typically offer more efficient manufacturing and lower maintenance needs, but used equipment could result in lower acquisition costs and faster availability.

In addition to protecting your working capital, machinery financing can provide tax benefits to qualified companies. You may be able to depreciate 100% of an equipment purchase in the first year of ownership. This choice can result in substantial tax savings and help offset the long-term investment costs of your company’s new machinery and equipment. NOTE:  Consult your tax advisor for specific IRS rules of eligibility and any potential tax benefits/savings based on your particular situation and your particular equipment purchase.  

Applying For Industrial Equipment Loans 

The process of applying for industrial machinery financing with Texas Gulf Bank begins with an initial assessment to determine your company’s viability for loan qualification and approval. Your company’s history and financial records will be reviewed, along with details on how your machinery or equipment purchases will be used.

Loan applicants should meet the following qualifications:

  • Three years of business operations
  • Demonstrate profitability
  • Provide proof of cash and asset liquidity to support full repayment of loans
  • Positive cash flow

Another key component of your loan assessment involves a review of all relevant details concerning the new or used machinery to be financed. We ask that applicants provide the following information to help our lenders assess the viability of your intended purchase:

  • Description of equipment
  • Purchase price of new or used equipment
  • Expected use of equipment
  • Expected lifespan of the equipment.
  • Length of service of used equipment prior to a potential purchase
  • Current market value of used equipment

After completing the loan assessment, your company will need to submit documentation including, but not limited to:

  • Completed equipment loan application
  • Company financial statements for the most recent 3 years
  • Company tax returns for the most recent 3 years
  • Personal financial statements from loan guarantor(s) for the most recent 2 years
  • Current credit history and credit score

As a local, community-based bank, TGB has the ability to offer a prompt in-house loan review and disbursement process. If approved, your loan will be processed promptly to allow you to purchase your machinery and integrate them into your production process as soon as possible.

Choose Texas Gulf Bank for Machinery Financing

With over 100 years of experience, Texas Gulf Bank has proudly served the Gulf Coast region by strengthening businesses through various strategic and trustworthy commercial financing solutions. We apply our in-depth understanding of local markets, industries, and finance options to help your business succeed and grow, all while providing exceptional customer service.

Because we believe banking is personal, we take the time to understand your business, discuss your company goals, and provide you with effective lending options that meet the unique needs of your business.

Our team of loan officers has extensive expertise in financing industrial machinery and heavy equipment for industries such as manufacturing, construction, and transportation. We are confident we can identify the right financing option to help you obtain the necessary equipment to ensure your fabrication or machine shop thrives for years to come.

To start the application process for industrial machinery financing, contact our team today, complete the helpful contact form below, or stop by one of our banking centers to meet with a lender.

We look forward to discussing how our financing solutions can help your business achieve long-term success and growth.

All Loans Subject to Credit Approval