For manufacturers, cash flow is the heartbeat of the business. Raw materials, production runs, wages, delivery costs – it all needs to be paid long before an invoice is ever settled, and that time gap is widening.
Right now, many British manufacturing businesses are feeling the squeeze, orders are coming in, but the cash to fund them is increasingly hard to find. Supply chain disruptions, increased energy costs, longer payment terms, and rising raw material prices are putting immense strain on working capital. According to the latest figures from the Office for National Statistics, UK manufacturing output fell by 0.8% in March 2025, reversing February’s short-lived rebound, meanwhile BDO’s most recent manufacturing outlook shows that business confidence has taken its sharpest fall since the pandemic, with a 15% drop in sentiment since late 2024. Manufacturers aren’t short on demand, but they are short on liquidity.
The good news is that a cash flow crisis doesn’t need to be terminal, there are the financial tools available that can provide fast, flexible support if you know where to look.
The cash is tied up.
The first step to solving a manufacturing cash flow problem is to understand that the business might not be short of money, it’s simply that the money is locked up in places it can’t be accessed. Unpaid invoices, stock waiting to be sold, or raw materials sitting in a warehouse all represent cash that belongs to the business. The challenge is how to unlock it without taking on unsuitable debt or selling equity unnecessarily.
Two of the most effective solutions for manufacturers in this position are invoice finance and stock finance. These are well-established forms of commercial funding that can be arranged relatively quickly, especially through an independent broker with access to multiple lenders.
Invoice finance allows a business to draw down funds against its outstanding invoices, rather than waiting 30, 60, or even 90 days to be paid. Instead of chasing clients or stretching supplier terms, you can unlock the money owed to you, usually within 24 to 48 hours. This is particularly helpful for manufacturers who deal with large clients or public sector buyers who insist on long payment cycles. It puts control of cash flow back in the hands of the business, not the buyer.
There are different types of invoice finance, but the principle is the same – your invoices act as the security. Some businesses prefer full-service factoring, where the finance provider also takes on credit control. Others choose invoice discounting, which keeps customer relationships in-house, but whichever way, the benefit is immediate to the business.
Stock finance is equally powerful. For businesses with high levels of inventory or raw materials, this type of funding allows them to release cash against the value of their stock. This can be particularly useful when preparing for a seasonal peak or fulfilling a large order, where working capital is needed upfront to buy in volume. Instead of dipping into reserves -or worse, turning away business – stock finance allows companies to bridge the gap between purchasing and selling.
What both solutions share is their focus on assets the business already has. They’re not about speculative lending or asking for personal guarantees, they’re based on tangible value like goods, invoices and orders. And crucially, they’re flexible – the amount available grows as the business grows, which is why they’re often described as self-funding.
Moving quickly, thinking long-term
When you’re in the middle of a cash flow crunch, speed matters, but it doesn’t mean decisions should be rushed. One of the problems we see all too often is that businesses go straight to their bank or apply online with the first lender that appears. The result is either a rejection, due to restrictive lending criteria, or an offer that’s not quite right, perhaps the terms are too short, the cost too high, or the product too rigid.
An independent commercial finance broker changes that game, with access to a wide panel of funders, including many that don’t advertise directly – they can match your business with the right solution, not just the most obvious one. They’ll also do much of the heavy lifting when it comes to presenting your case, ensuring your application includes the right financials, trading history, and rationale. That alone can be the difference between approval and delay.
At Able Commercial Finance, we regularly work with manufacturing firms who are in distress but still fundamentally viable. They don’t need handouts – they just need some headroom. By combining invoice and stock finance, we’ve helped manufacturers bridge gaps, seize new orders, and put long-term plans back on track. It’s not about selling finance, it’s about finding the right fit.
In fact, UK Finance reports that over £20 billion is currently advanced to businesses at any one time through invoice and asset-based lending facilities, supporting some 35,000 firms across the UK. That’s a clear signal that this type of funding is no longer niche. It’s mainstream, it’s accessible, and it works, especially when traditional routes fall short.
Cash flow crises are painful, but they’re not the end with the right guidance and a clear strategy, manufacturers can turn the tide. The work you’ve done to build your order book, grow your customer base, and develop your capability shouldn’t be undone by something as fixable as timing.
If you’re under pressure, or just want to explore your options, we’re here to help. Let’s talk about how invoice and stock finance can keep your production line moving, your team paid, and your business thriving.
