When You Lose a Key Supplier
Overseas conflict and supply chain disruption can cut off a critical supplier. Switching to domestic or alternate sources often requires new equipment, different raw materials, inventory buildup, and working capital to manage the transition. SBA 7(a) and 504 loans can fund that pivot.
How SBA Loans Support a Pivot
An SBA 7(a) loan can fund working capital, equipment, and inventory. A 504 loan can finance real estate and major equipment. Use the funds to qualify new suppliers, retool for different materials, and build inventory during the transition. Lenders want a clear plan: what you’re changing, why, and how you’ll repay.
Equipment and Inventory Financing
New equipment may be needed to work with domestic materials or different specs. Equipment financing can complement or substitute for SBA when you need faster funding for machinery. Inventory financing can help you stock up during the supplier switch. Combine options as needed.
Working Capital for the Transition
The transition period often creates cash flow gaps: you pay for new materials and setup before revenue adjusts. Working capital loans or an line of credit can bridge that. SBA 7(a) working capital can also be used for the transition.
Final Thoughts
Losing an overseas supplier requires a pivot. SBA loans can fund new equipment, domestic suppliers, inventory, and working capital to make the shift. Get matched with SBA lenders who work with manufacturers.