K&Y Manufacturing Accelerates Growth with Line of Credit

K&Y Manufacturing secured a $125,000 line of credit to manage cash flow gaps and fund equipment upgrades, resulting in 40% production capacity increase and improved client retention.

Edward Yarborough, Plant Manager & Co-Owner of K&Y Manufacturing Solutions a manufacturing business in North Texas standing comfortably

Executive Summary

K&Y Manufacturing Solutions, a precision metal fabrication company in Arlington, Texas, faced cash flow constraints that limited growth opportunities despite strong market demand. The company obtained a $125,000 business line of credit to address working capital needs and fund strategic equipment purchases. This investment positioned the company to increase production capacity and strengthen customer relationships.

The Challenge

Seasonal payment delays from major automotive suppliers created 30-45 day cash flow gaps
Outdated CNC equipment limited production capacity to meet growing customer demand
Risk of losing key contracts due to inability to meet aggressive delivery timelines

The Solution

K&Y Manufacturing selected a $125,000 business line of credit for its flexibility and favorable terms compared to traditional term loans. The revolving credit structure allowed the company to draw funds only when needed, minimizing interest costs during slower months. This financing solution was ideal for a manufacturing operation with predictable but variable cash flow cycles.

The company deployed the credit strategically: $65,000 went toward a new computer-controlled lathe with automated finishing capabilities, reducing production time by 35%. The remaining $60,000 served as working capital to cover payroll and materials during the typical 40-day payment lag from major clients. This dual approach addressed both immediate cash flow constraints and long-term production bottlenecks.

Edward Yarborough, Plant Manager & Co-Owner
"The line of credit gave us the flexibility to invest in new equipment without depleting our reserves. We've doubled our order fulfillment speed and retained our largest client who was considering competitors."

The Outcome

Production capacity increased 40% within 6 months, enabling the company to accept $180,000 in previously declined orders
Monthly cash flow stabilized with an average DSO reduction from 42 days to 28 days through improved working capital management
Customer retention improved as delivery timelines shortened, resulting in a contract extension worth $420,000 over 18 months

Conclusion

The $125,000 line of credit proved transformative for K&Y Manufacturing, solving both immediate liquidity challenges and enabling capital investment in productivity-enhancing equipment. The flexible nature of the credit line allowed the company to optimize borrowing costs while maintaining operational stability through seasonal fluctuations.

Looking Forward

K&Y Manufacturing is now exploring additional equipment financing for a second production shift, with plans to grow from 15 to 22 employees within the next 18 months. Management attributes this expansion trajectory directly to the financial flexibility and confidence gained through the business line of credit.