The defence subcontract was won. The aerospace-grade raw materials cost landed first. A precision manufacturer needed $400K of inventory in the door before production could begin, against a contract that paid on delivery milestones. They owned two 5-axis CNC machining centres outright. ABL released the equity, fitted GPS tracking, and both machines kept running daily production. The plant was the security. Production never stopped.
The situation
Raw materials cost. A short-term gap caused by a defence subcontract win that paid on delivery milestones while aerospace-grade stock had to be ordered weeks in advance.
The manufacturer owned two 5-axis CNC machining centres outright. Both at peak utilisation on existing work. The new subcontract would slot in alongside, but the materials cost landed first.
This is what asset-based lending looks like at its simplest. A business owns an asset with equity in it. They need short-term cash. ABL releases the equity for the loan term, and the asset comes home on repayment. Same shape as a home equity loan, just with a different asset class.
The asset
Two 5-axis CNC machining centres. Both owned outright by the manufacturer. Both running daily production on existing commercial work.
For an asset-based lender, that’s enough to underwrite. The asset is the security, the business is the borrower, the deal doesn’t need a polished P&L to make sense.
The need
$400K for aerospace-grade raw materials and specialist tooling. The kind of cash that has to land before the order goes to the supplier, not the six weeks a bank takes to understand a defence subcontract.
The structure
The deal went through as a Track It facility. $400K disbursed. Total loan amount was $432,000 with fees built in. GPS tracking units fitted to both machining centres for the loan term.
Both machines stayed on the floor. Same production, same schedule. ABL had visibility on the assets, the manufacturer had cash for materials, the new contract slotted into the production roster without disruption.
That’s the Track It structure. The plant stays in service across the loan term and the trackers come off on repayment.
- Product: Track It
- Asset: Two 5-axis CNC machining centres, owned outright
- Disbursement: $400K
- Loan amount: $432,000 (includes fees)
- Use of funds: Working capital / raw materials prepayment
- Security: GPS trackers fitted, both machines remained on the production floor
The outcome
Funds in the manufacturer’s account in time to order the aerospace stock. Both machines on the floor producing existing work, GPS confirming location, loan repaying out of the first two milestone payments. The new defence contract delivered on schedule.
Defence work pays well, but it pays on delivery. The materials cost lands first. The plant’s already there making other parts. We can release the equity and the factory keeps running.
Why this deal worked
Three things had to be true for the deal to work. They’re the same three things every Track It deal needs:
- An asset with real equity, owned outright. Neither machine was financed and nothing else sat against them. Both could be secured cleanly without leaving the production floor.
- A short-term gap, not a long-term issue. The need was for a few months, not years. That’s the kind of bridge ABL is built for.
- The right product for the asset. With both machines at peak utilisation on existing work, parking either would have cost the manufacturer existing revenue. Track It kept them producing while the deal ran.
If your client has won a contract that pays on delivery and needs to fund raw materials upfront, that’s an ABL conversation. The machines that make the parts are the security that funds the materials. Track It is the structure that lets the factory keep running while the bridge is in place.
Got a manufacturer funding raw materials upfront?
If your client owns production plant outright and needs to bridge a raw materials gap on a milestone-paid contract, Track It is the structure. We release the equity, fit a tracker, and the plant keeps producing. Free desktop valuation and a clear borrowing figure, all inside 2 hours. Same-day settlement when the asset is secured.