Why Providers of Financial Services Should Pursue More Manufacturing Leads Right Now

4 MIN. READ

The COVID-19 outbreak is affecting every facet of life and business, forcing industries like manufacturing to upend their usual processes and adapt to this new dynamic. While some manufacturing sectors are increasing production, others are shutting down indefinitely. We're also seeing some manufacturers shifting production toward essential medical supplies.

A survey conducted by the National Association of Manufacturers in early March 2020 indicated that 35% of manufacturers were already experiencing supply chain disruption, while 78% expected COVID-19 to have an impact on their finances.

Between shutdowns and drastic changes in demand, manufacturers are facing an uncertain situation.

While relief efforts like the SBA's Disaster Assistance Program or the Paycheck Protection Program have been created to help businesses and support the economy, manufacturers are still facing a number of challenges as they have to navigate unfamiliar and sometimes lengthy application processes.

Furthermore, the relief efforts currently in place might not be sufficient to curb the impact of the outbreak, and manufacturers are calling for the creation of an additional resiliency fund. However, it could be a while before we see such additions. As such, manufacturers need financial services now more than ever to withstand the current challenges.

If you work in the financial services sector, supporting and buidling relationships with manufacturers should be a major priority. A service like IndustrySelect gives you access to 500,000 industrial businesses, including 400,000 U.S. manufacturers and 100,000 companies in the global energy industry. Profiles contain direct contact informaiton for millions of executives, including CEOs and CFOs as well as contacts in accounting, HR, payroll and more. 

Communication

As manufacturers face shifts in their established processes, they need to know they can count on you. Now is the perfect time to reach out and communicate with prospects and existing clients alike. Advertising on a site like IndustryNet can also put your business in front of millions of manufacturers and industrial buyers.

To best assist them, learn more about each manufacturer's current situation - they are all facing unique challenges and a one-size-fits-all approach isn't going to work.

Additionally, to absorb COVID-19's impact and keep business continuity flowing, manufacturers are likely to consider new options and financing products, like opening a new credit line or addressing cash flow issues with invoice financing.

Keep this in mind when reviewing all of their potential solutions.

Focusing on communication and outreach, especially now, will help you grow your customer base as you establish yourself as an innovative, reliable partner that is sensitive to the situation manufacturers are going through.

Make Financing Accessible

After establishing an open line of communication, be sure to acknowledge the urgency that some manufacturers are facing. Many need financing just to stay afloat and take care of crucial expenses like payroll, supplier payments or contract negotiations with new suppliers to address supply chain disruption.

You can help manufactures by providing information and assistance with applying for different relief programs. The CARES Act, a $2 trillion relief package designed to support families, small businesses and local governments, includes provisions for the following Treasury and SBA programs:

• Small businesses can get help through the Paycheck Protection Program to cover up to eight weeks of payroll costs.
• Small business owners can apply for an Economic Injury Disaster Loan of up to $10,000 to compensate for a loss of revenues.
• Manufacturers in eligible industries, like aerospace contractors, can apply for payroll support.
• The Treasury offers a payroll tax deferral program designed to improve cash flow.
• Manufacturers who are considering layoffs should look into applying for the Employee Retention Credit instead.

Flexibility

Making predictions for the future has become difficult since manufacturers don't know how long shutdowns will affect their industry and clients.

As a financial service provider, you can provide flexibility by letting borrowers skip payments or by waiving late fees.

Flexibility is tied to your communication strategy. Reach out to manufacturers, ask about their needs and offer a flexible solution that makes sense for them.

Offer a Variety of Products

Consider extending your product line or presenting clients with options they hadn't considered before. Those once-irrelevant options may now benefit them since many manufacturers' financial situation is changing at a fast pace.

Here are a few financial products manufacturers can benefit from:

• As businesses shut down, manufacturers might find that their usual clients aren't placing orders or can't pay open invoices. You can help manufacturers deal with cash flow disruption by offering invoice factoring options or a flexible credit line.

• Consider extending your product line to include invoicing or payment systems. Offering or recommending these products can help manufacturers adopt a streamlined invoicing process that will increase their collection rate and cash flow.

• Keeping costs down is a priority due to the uncertain future manufacturers are facing. Offering asset-based lending or using other collaterals will make financing more affordable.

• The coronavirus is disrupting international supply chains. Some manufacturers have to find new suppliers and negotiate deals. You can offer supplier financing deals and act as an intermediary in the purchasing process for raw materials.

• Refinancing existing loans and consolidating debt are two strategies manufacturers might consider as they approach insolvency. You can help by making this process easy to understand and by offering products adapted to the unique financial situation of each manufacturer.

Ready to start generating leads in manufacturing and the energy industry? Discover how an IndustrySelect subscription can help you get in direct touch with nearly a half million U.S. industrial companies and one million executives, including 400,000 manufacturing companies and 100,000 firms in the energy sector. IndustrySelect is powered by MNI, trusted industrial data provider since 1912. Try out a free demo today! 

Article Sources:

1. https://www.nam.org/how-coronavirus-is-affecting-manufacturers-7417/?stream=series-demystifying-data
2. https://www.nam.org/manufacturers-call-for-1-4-trillion-covid-19-resiliency-fund-7498/?stream=series-press-releases
3. https://home.treasury.gov/policy-issues/cares
4. https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-american-industry
5. https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses