Tennessee’s manufacturing sector—from automotive and aerospace to food processing and parts fabrication—drives regional growth. Access to the right financing helps manufacturers invest in machinery, facilities, and workforce development. This guide outlines top loan options for Tennessee-based manufacturing firms, including SBA programs, equipment loans, and state-supported funding.
Manufacturing businesses often require capital for:
Purchasing CNC machines, industrial ovens, and fabrication equipment
Building or upgrading production facilities and warehouses
Hiring skilled labor and technicians
Covering raw material and inventory costs
Launching automation, efficiency, or green manufacturing initiatives
Choosing the right loan improves cash flow, productivity, and competitiveness.
Up to $5 million, usable for working capital, equipment, facility upgrades, or debt refinancing
Long-term repayment, low interest rates, and modest down payments
Ideal for manufacturers planning capacity expansion
Designed for large fixed assets like buildings and heavy equipment
Financed via private lender, Certified Development Company, and borrower contribution
Offers long-term fixed rates and smaller down payment requirements
Up to $50,000, administered through nonprofit lenders
Suitable for minor equipment updates, tooling, or staff training
Includes mentorship for emerging manufacturers
Manufacturers can finance machinery and equipment through:
Equipment loans: Fixed payments over 3 to 7 years with equipment as collateral
Leasing: Conserves capital and enables scheduled upgrades
Vendor financing: Built into equipment purchase agreements
Short-term bridge loans: For rapid project entry or emergency replacements
These options help preserve cash while acquiring essential production assets.
State-aligned and mission-driven lenders offer:
Loan amounts from $10,000 to $500,000
Flexible terms beneficial to mid-size or underserved manufacturers
Support services such as financial planning, credit improvement, and business mentoring
Faster approval processes than traditional banks
CDFIs support companies that need both capital and operational guidance.
Tennessee banks and credit unions familiar with manufacturing offer:
Term loans or lines of credit secured by equipment, receivables, or inventory
Competitive rates and repayment terms aligned with production cycles
Relationship-driven service and local decision-making
These lenders often partner with manufacturers on long-term growth.
Tennessee offers several industry-specific funding and incentive programs:
Manufacturing modernization grants supporting automation and efficiency upgrades
Workforce training support for recruiting and upskilling employees
Energy-efficiency incentives to support clean or cost-saving installations
Economic development loans for projects linked to job creation and investment
These combined supports help firms stay competitive and grow responsibly.
Define the goal—equipment, building, workforce, or expansion
Choose a financing route: SBA, equipment loan, CDFI, or bank
Gather documentation: financials, credit score, plans, quotes
Prequalify with multiple lenders to compare terms
Apply using prepared materials and a clear business case
Receive funding and deploy strategically
Track KPIs—production output, cost savings, revenue gains
| Loan Type | Loan Size | Best Use Case | Considerations |
|---|---|---|---|
| SBA 7(a) | Up to $5 million | Large equipment, working capital, expansion | Requires strong credit and financial documentation |
| SBA 504 | Large fixed assets | Facilities, heavy machinery | Includes down payment; involves CDC oversight |
| SBA Microloan | Up to $50,000 | Tooling, small upgrades, pilot projects | Lower amounts and potential mentor support |
| Equipment Loan/Lease | Varies | Production machinery and tech | Asset-backed; approval often quick |
| Bank/CU Term Loan | Varies | Ongoing operations and inventory financing | Familiar terms; relationship-driven service |
| CDFI Loan | $10K–$500K | Underserved or flexible manufacturing needs | Mission-focused lenders with flexible criteria |
| State Manufacturing Loans | Varies | Modernization, training, energy upgrades | Often tied to job creation or efficiency benchmarks |
A Chattanooga parts manufacturer planned to modernize its shop floor and hire technicians. They:
Applied for an SBA 504 loan to purchase automation equipment and finance a facility upgrade
Used a $120,000 CDFI loan to fund staff training and inventory buildup
Established a line of credit with a local bank for working capital management
Result: Efficiency improved 25%, production capacity increased, and new hires boosted local employment.
Maintain business and personal credit scores above 650
Prepare two years of clean financial statements and tax returns
Collect quotes for equipment and renovation costs
Build a detailed plan projecting cost savings, output gains, and ROI
Work with Tennessee SBDCs or manufacturing assistance centers
Prequalify with a variety of lenders to find the best deal
Tennessee manufacturing firms have access to a diverse financial toolkit—ranging from traditional SBA and equipment loans to flexible CDFI support and state development programs. By defining clear investment goals and preparing strong documentation, manufacturers can secure funding that drives growth, competitiveness, and long-term success.
Define your main capital need—equipment, facility, workforce, or expansion
Match that need to the best financing option(s)
Gather financials, quotes, and a business plan
Prequalify with lenders: SBA-approved, CDFIs, and banks
Apply confidently and deploy funding strategically
Need help selecting the best loan or preparing your application? I’d be glad to help your Tennessee manufacturing business grow stronger.