AMS Manufacturing Accelerates Production with Working Capital

South Texas precision parts manufacturer secured $125K working capital loan to expand inventory and meet growing demand, achieving 40% production increase within 6 months.

Marco Delgado, Operations Manager & Co-Founder of AMS Manufacturing Co a manufacturing business in South Texas standing confidently

Executive Summary

AMS Manufacturing Co, a 15-year-old precision parts manufacturer in Corpus Christi, secured a $125,000 working capital loan to capitalize on increased market demand. The company used funds strategically to expand raw material inventory and reduce production lead times, resulting in significant revenue growth and improved client relationships.

The Challenge

Cash flow constraints limited raw material purchases despite consistent customer orders
Production bottlenecks caused 6-8 week lead times, risking customer contracts to competitors
Inability to offer bulk discounts on large orders due to inventory limitations
Working capital tied up in receivables while suppliers demanded faster payment

The Solution

AMS Manufacturing recognized that their primary constraint was working capital, not market demand. With $125,000 in available financing, the company could address the cash conversion cycle by maintaining higher inventory levels of commonly-used materials while simultaneously improving payment terms with suppliers. This strategic approach would compress production timelines and increase customer satisfaction.

The loan proceeds were allocated as follows: $75,000 toward expanding raw material inventory (stainless steel, aluminum, and specialty alloys), $30,000 to establish better supplier relationships through improved payment terms, and $20,000 to implement inventory management software that reduced waste by 12%. Within the first 90 days, production lead times decreased from 6-8 weeks to 3-4 weeks, enabling the company to pursue larger contract opportunities previously unattainable.

Marco Delgado, Operations Manager & Co-Founder
"The working capital loan came at the perfect time. We had orders lined up but couldn't fill them without inventory capital. This funding unlocked our growth potential and transformed our business trajectory."

The Outcome

Production capacity increased by 40% within six months, generating an additional $180,000 in quarterly revenue
Customer retention improved to 94% as lead times decreased and order fulfillment became predictable
Gross margins expanded by 3.2 percentage points through reduced overtime costs and improved production efficiency

Conclusion

The $125,000 working capital loan proved transformational for AMS Manufacturing, converting constrained cash flow into accelerated growth. By strategically deploying capital across inventory and operational improvements, the company positioned itself as a reliable partner for larger manufacturing contracts in South Texas's competitive industrial sector.

Looking Forward

AMS Manufacturing is now exploring a $200,000 expansion loan to invest in CNC equipment and hire additional machinists. Management projects another 35% revenue increase within 18 months as they scale operations to serve regional aerospace and defense contractors throughout Texas.