At a Glance
- Long-lead manufacturing equipment—stamping presses, machining lines, automation cells, battery tooling—now routinely carries 12- to 24-month build times with staged payments the buyer must fund before delivery.
- Delivery-based equipment finance leaves that year-plus bridge to the borrower’s working capital or revolver, which is exactly the opening a progress-payment structure exploits.
- The core challenge is control and perfection on an asset that does not yet exist—not credit on a borrower who is usually strong.
- In a survey of middle market manufacturers, Secured Research found 52% that placed an equipment order with a build time exceeding 12 months funded the progress payments from working capital or a bank revolver rather than equipment finance.
The Capex That Doesn’t Fit Your Funding Model
A domestic manufacturer deciding to reshore a production line, add automation, or stand up battery or food-processing capacity is not buying equipment off a lot. It is placing an order for machinery that will be fabricated over the next twelve to twenty-four months, often overseas, against a payment schedule that front-loads the cash: a deposit at order, progress payments at defined fabrication milestones, and a final tranche at delivery or acceptance. A 30/30/30/10 schedule on a $4 million line means $1.2 million leaves the customer’s account before a single component is shipped.
