Machine Shops
332710
T Bank, National Association (TX)
Shoreham Bank (RI)
Shoreham Bank offers Retail Banking, Mortgages, Home Equity Loans, Auto Loans, and much more. Providing our customers with convenience and reliable service since 1959.
Seacoast National Bank (FL)
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Peoples Bank (MS)
Peoples Bank is a Small Business Administration Preferred Lender with 30 years SBA Lending Experience. Small Business Loans tailored for you.
JPMorgan Chase Bank, National Association (OH)
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iTHINK Financial CU (FL)
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Florida First Capital Finance Corporation, Inc. (FL)
Commercial real estate and fixed heavy duty machinery and equipment loans for growing small businesses available through the SBA 504 Loan Program
First Utah Bank (UT)
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First Mid Bank & Trust, National Association (IL)
First Mid Bank & Trust offers commercial & personal banking, insurance, & wealth management services throughout Illinois, Missouri, Texas & Wisconsin.
SBA Loans for Machine Shops: Financing Precision Manufacturing Businesses
Introduction
Machine shops are the backbone of U.S. manufacturing, producing precision parts and components for industries like aerospace, automotive, defense, energy, and medical devices. Classified under NAICS 332710, machine shops provide custom machining, fabrication, and repair services critical to supply chains. Despite strong demand, shop owners face significant financial challenges. High equipment costs, labor shortages, material expenses, and cash flow delays often make running a shop difficult without outside financing.
This is where SBA Loans for Machine Shops provide a powerful solution. Backed by the U.S. Small Business Administration, SBA loans offer affordable financing with longer repayment terms, lower down payments, and government-backed guarantees that reduce lender risk. Whether you need CNC machines, raw materials, or working capital, SBA loans can help machine shop owners scale sustainably.
In this article, we’ll explore NAICS 332710, the financial challenges machining businesses face, how SBA loans help, and the most frequently asked questions about SBA financing for machine shops.
Industry Overview: NAICS 332710
Machine Shops (NAICS 332710) include businesses primarily engaged in machining metal and plastic parts on a job or order basis. Typical services include:
- CNC milling and turning
- Grinding, drilling, and tapping
- Tool and die making
- Prototyping and short-run production
- Repair and custom fabrication
Machine shops support nearly every major industry, but they are capital-intensive and highly competitive. To remain profitable, shops must invest in new technology, skilled workers, and efficient production systems.
Common Pain Points in Machine Shop Financing
From Reddit’s r/Machinists, r/Manufacturing, and Quora discussions, owners regularly highlight these financing challenges:
- High Equipment Costs – CNC machines, lathes, mills, grinders, and automation tools can cost hundreds of thousands of dollars each.
- Raw Material Expenses – Steel, aluminum, plastics, and specialty alloys require bulk purchasing, straining cash reserves.
- Skilled Labor Shortages – Recruiting machinists, programmers, and toolmakers is costly and competitive.
- Cash Flow Gaps – Payment delays from large clients or government contracts create liquidity challenges.
- Bank Loan Denials – Many traditional lenders hesitate to finance machine shops due to industry volatility and equipment-heavy operations.
How SBA Loans Help Machine Shops
SBA loans make it easier for machining businesses to secure capital for equipment, staffing, and growth initiatives.
SBA 7(a) Loan
- Best for: Working capital, payroll, equipment, or refinancing debt.
- Loan size: Up to $5 million.
- Why it helps: Covers day-to-day expenses, purchasing raw materials, or hiring skilled machinists.
SBA 504 Loan
- Best for: Real estate and large-scale equipment purchases.
- Loan size: Up to $5.5 million.
- Why it helps: Perfect for acquiring a facility, upgrading CNC machinery, or investing in robotics and automation systems.
SBA Microloans
- Best for: Small startups or niche machine shops.
- Loan size: Up to $50,000.
- Why it helps: Great for purchasing hand tools, software, or covering licensing and setup costs.
SBA Disaster Loans
- Best for: Recovery after natural disasters or operational disruptions.
- Loan size: Up to $2 million.
- Why it helps: Provides working capital to repair facilities, replace equipment, or stabilize operations.
Step-by-Step Guide to Getting an SBA Loan
- Check Eligibility – Must be a U.S.-based, for-profit business with good personal and business credit (usually 650+).
- Prepare Financial Documents – Tax returns, P&L statements, contracts, and purchase orders from clients.
- Find an SBA-Approved Lender – Some lenders specialize in manufacturing and understand machine shop financing needs.
- Submit Application – A detailed business plan with projections, industry niche, and expansion goals increases approval chances.
- Underwriting & Approval – SBA guarantees reduce risk for lenders. Approval typically takes 30–90 days.
FAQ: SBA Loans for Machine Shops
Why do banks often reject machine shop loans?
Banks view machine shops as high-risk due to equipment-intensive operations and cyclical demand. SBA guarantees lower lender risk, making financing more accessible.
Can SBA loans finance CNC machines and robotics?
Yes. SBA 7(a) and 504 loans are frequently used to purchase CNC machines, robotic arms, and other advanced manufacturing technology.
What down payment is required?
SBA loans typically require 10–20% down, compared to 25–30% with conventional loans.
Are startups eligible for SBA loans?
Yes. Startups can qualify if they demonstrate machining experience, a strong business plan, and good credit.
What repayment terms are available?
- Working capital: Up to 7 years
- Equipment: Up to 10 years
- Real estate: Up to 25 years
Can SBA loans fund expansion into aerospace, medical, or defense contracts?
Absolutely. SBA loans can finance equipment and staffing needed to take on high-value contracts in specialized industries.
Final Thoughts
The Machine Shop industry is vital to U.S. manufacturing but requires significant capital investment to remain competitive. SBA Loans for Machine Shops give owners the working capital, equipment financing, and long-term stability needed to grow and succeed.
Whether you’re a small shop buying your first CNC machine or an established manufacturer expanding into new industries, SBA financing can provide the resources to scale with confidence. Connect with an SBA-approved lender today and explore your options.
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