A Lexington, NC plant waiting on net-60 invoices can cover payroll and raw material with working capital or a business line of credit: the money goes out for wages and steel now and comes back when customers pay two months later. Machines stay on equipment financing or a term loan. Boldpine Lenders gathers the details; funding partners decide.
Wages and material bought before a net-60 customer pays fit working capital or a line of credit; machines fit equipment financing or a term loan. Invented figures show a shop with healthy working capital on paper and too little cash for the wait. Partners decide.
Working Capital Format: How a Lexington, NC Machine Shop Lays It Out Before a CMM Order
Working capital is current assets less current liabilities: cash, receivables and inventory on one side, and payables, accrued wages and debt due within a year on the other. The format is simple. What it hides is timing.
| Line | Amount |
|---|---|
| Cash in the bank | $48,000 |
| Receivables on net-60 terms | $312,000 |
| Raw material and work in process | $96,000 |
| Current assets | $456,000 |
| Payables to suppliers | $141,000 |
| Accrued payroll | $38,000 |
| Debt due within a year | $64,000 |
| Current liabilities | $243,000 |
| Working capital | $213,000 |
On paper the shop holds $213,000 of working capital. In the bank it has $48,000, and $312,000 sits in invoices that pay in 60 days. With $41,600 of payroll every second Friday, 4 or 5 paydays fall inside a 60-day wait: $166,400 or $208,000, against $48,000 of cash.
That shop now wants a coordinate measuring machine. Paid from cash, the CMM would deepen the gap; on equipment financing, Illustration only, invented figures: a $57,400 CMM over 60 months at a 9.6% annual rate is a $1,208.31 monthly bill instead.
Working Capital for HOA Contract Work and Equipment Repairs: Notes for Lexington, NC Contractors
A homeowners association pays on its board's calendar, not the contractor's. A contractor holding an HOA maintenance contract can finish the month's work and wait for the board to sign off at its next meeting before the check is cut. Working capital for HOA work carries the crew through that wait:
- Illustration only, invented figures: crew payroll is $9,200 every two weeks, and the HOA pays 35 days after the invoice. Depending on the calendar, 2 or 3 paydays land first: $18,400 or $27,600.
- Illustration only, invented figures: a $4,300 hydraulic repair on a loader is a line draw, not new equipment financing, because the repair adds no new machine. At a 12.25% annual rate for 35 days the draw carries $50.51 of interest (simple, 365-day year).
- Invoices to the board name the contract period and the work done, which gives a partner something concrete to read.
Payroll is the bill a contractor cannot move. Construction establishments (NAICS 23) in Davidson County, NC paid $133.3 million in annual payroll in 2023 and reported 2,413 paid employees in the March pay period, County Business Patterns shows.
The construction page works through a mini excavator and framing payroll with other invented figures.
Working Capital for an SME: Raw Material and Tooling at a Lexington, NC Machine Shop on Net-60 Terms
SME stands for small and medium-sized enterprise, and for an SME on net-60 terms the money is out longer than the invoice date suggests. Material is ordered when the purchase order lands, paid to the service center on its own terms, and the customer's 60 days start only when the parts ship.
Illustration only, invented figures: a shop buys $73,500 of steel and aluminum and $12,800 of tooling for one order, pays the service center on day 30, ships on day 45 and collects on day 105. The money is out for 75 days. A line of credit draw of $86,300 for those 75 days at an 11.25% annual rate carries $1,994.95 of interest.
Tooling that lasts for years, such as a set of holders and fixtures for a long-running part, can go on a term loan instead, so the line stays open for material.
Shops in this position are a sizable group here: Davidson County, NC counted 224 manufacturing establishments (NAICS 31-33) in the 2023 County Business Patterns, 27.7% of them with fewer than five employees.
Working Capital Explained With a Davidson County, NC Contractor Pricing a Skid Steer
Working capital, explained with one contractor: the cash that is left after the bills due within a year are counted is what carries the crew between jobs. Spending it on a machine makes the next wait harder.
Illustration only, invented figures: a Davidson County, NC contractor has $72,000 in the bank and is pricing a $54,300 skid steer. Payroll is $13,600 every two weeks, and the next job pays 45 days after the invoice, so 3 or 4 paydays fall in the wait: $40,800 or $54,400. Paying cash for the machine leaves $17,700, enough for one payday.
Financed instead over 60 months at a 10.15% annual rate, the skid steer is $1,157.73 a month, and the $72,000 stays available for wages. Working capital and a line of credit then cover only what the cash cannot.
The machine shop page and the Lexington, NC page carry more Davidson County, NC figures for plants and other trades.
By Boldpine Lenders · Updated
