Premium Manufacturing Solutions Working Capital Growth

Premium Manufacturing Solutions secured a $275,000 working capital loan to expand production capacity and optimize inventory management, resulting in 40% revenue growth within 18 months.

Marco Delgado, Founder & CEO of Premium Manufacturing Solutions Inc. a manufacturing business in Bakersfield, California standing proudly

Executive Summary

Premium Manufacturing Solutions Inc., a mid-sized precision manufacturing firm in Bakersfield, California, secured a $275,000 working capital loan to address rapid business growth and operational constraints. The company successfully deployed the capital to increase production capacity, expand raw material inventory, and strengthen cash flow management, achieving substantial revenue growth and improved operational efficiency.

The Challenge

Insufficient working capital to fulfill large purchase orders before receiving customer payments, creating a cash flow gap of 45-60 days
Limited ability to maintain optimal inventory levels of raw materials, causing production delays and missed delivery deadlines
Outdated equipment and manual processes reducing production efficiency by an estimated 25%, limiting the company's capacity to take on larger contracts

The Solution

Premium Manufacturing Solutions required immediate working capital to bridge the gap between production expenses and customer payments. The $275,000 loan was strategically designed to support the company's rapid growth trajectory while maintaining operational stability. By securing this financing, the company could address the root causes of their cash flow constraints without taking on long-term debt that would impact profitability.

The funds were allocated strategically across three key areas: $125,000 was invested in raw materials and inventory to enable the company to accept larger orders and reduce production delays; $100,000 was used to upgrade machinery and implement semi-automated processes, significantly improving throughput and quality; and $50,000 was retained as operational reserve to manage the 45-60 day payment cycles inherent in their industry. This balanced approach ensured immediate production capacity gains while building financial resilience.

Marco Delgado, Founder & CEO
"This working capital loan was transformational for us. We could finally fulfill larger orders, upgrade our equipment, and invest in the inventory we needed to capture market opportunities without straining our cash flow."

The Outcome

Revenue increased by 40% within 18 months, growing from $2.8M to $3.9M annually, with larger contracts from tier-one aerospace suppliers contributing significantly to this growth
Production efficiency improved by 28% through equipment upgrades and process optimization, reducing lead times from 21 days to 15 days on average orders
Cash flow stability improved dramatically with the working capital reserve, reducing days sales outstanding from 58 days to 42 days and eliminating previous payment delay issues

Conclusion

The $275,000 working capital loan proved instrumental in removing operational bottlenecks and enabling Premium Manufacturing Solutions to scale rapidly. The strategic allocation of capital across inventory, equipment, and operational reserves created a sustainable growth platform that attracted new high-value clients and strengthened the company's competitive position in precision manufacturing.

Looking Forward

With improved operational metrics and a strong cash flow position, Premium Manufacturing Solutions is planning to expand its facility by 3,000 square feet in 2025 to accommodate additional CNC machines and a dedicated quality control laboratory. The company projects revenue growth to $5.2M within the next two years, supported by an expanding customer base and increased production capacity from their recent capital investments.