A commercial manufacturer found itself at a critical growth moment as demand for its products surged well beyond existing production capacity. Order volumes increased rapidly, pushing customer lead times out as far as 12 months. While demand signaled strong market positioning, extended delivery timelines risked straining customer relationships and limiting future growth. To address the backlog and meet customer expectations, the company made the strategic decision to open a second production facility—but doing so required significant upfront capital.
Vision
The manufacturer's leadership set a clear objective: increase output, shorten delivery timelines, and better serve existing customers while capturing new business. By doubling production capacity, the company aimed to reduce bottlenecks, improve operational efficiency, and strengthen its competitive position in a growing market.
Opportunity
Launching a second facility presented a meaningful opportunity to convert demand into revenue more quickly. Faster production cycles would reduce order backlog, improve customer satisfaction, and unlock additional market share. However, realizing this opportunity depended on securing enough working capital to fund labor and materials throughout the company's 90-day production cycle, well before revenue from finished goods would be realized.
Challenge
Several financial and operational hurdles stood in the way:
Production-to-Revenue Lag
A 90-day production cycle created a delay between upfront costs and incoming revenue.
Immediate Liquidity Need
The new facility required $1 million in working capital to cover staffing and materials.
Operational Risk
Without adequate funding, the expansion could stall, leaving capacity underutilized and demand unmet.
How Fora Financial Helped
Fora Financial provided a $1 million working capital solution designed to support the manufacturer through its expansion phase. The financing was structured over an 18-month term, with flexible prepayment options that allowed repayment to align with revenue as production scaled. This approach ensured the company had the liquidity needed to operate the new facility while maintaining control over total capital costs as cash flow improved.
Results
The impact of the financing was immediate and measurable:
New Facility Launch
Operations at the second facility began on schedule, allowing production to ramp quickly.
Sustained Liquidity
The company maintained stable cash flow throughout the production cycle despite delayed revenue realization.
Improved Customer Experience
Shorter lead times helped strengthen customer relationships and secure repeat business.
Scalable Growth
Increased capacity positioned the manufacturer to continue growing alongside demand.
Conclusion
With the right capital structure in place, the manufacturer was able to scale operations without disrupting cash flow or day-to-day execution. The expansion allowed the company to reduce backlog, meet customer demand more efficiently, and lay the groundwork for sustained growth. By aligning financing with production realities, the business turned surging demand into a long-term competitive advantage.
Why Fora Financial
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Customized Structure
The financing terms were designed around the company's production cycle and revenue timing, providing flexibility during the ramp-up period while allowing for early repayment as cash flow increased.
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Manufacturing Insight
The company valued working with a partner that understood the urgency and complexity of manufacturing operations, including long production timelines and significant upfront material costs.
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Speed & Simplicity
With demand continuing to rise, timing was critical. A fast approval process and streamlined execution allowed the company to move forward with expansion plans without unnecessary delays.