Waiting 90 days for payment? Compare working capital options for Alaska manufacturers, including credit lines, factoring and inventory financing.
A large customer places another order. Your production schedule fills up, but materials, wages and freight must be paid long before the customer’s net-90 invoice comes due.
Working capital for manufacturers in Alaska needs to cover more than three months of receivables. Purchasing, production, delivery and customer acceptance can extend the cash gap well beyond the stated payment terms.
This guide explains how to calculate that gap, compare financing structures and avoid borrowing against assets that a lender may exclude. All dollar amounts are in U.S. dollars.
Quick Answer: Alaska manufacturers with net-90 customers may consider revolving credit, receivables financing, invoice factoring or working capital loans. The right structure must cover production costs before invoicing and the collection period afterward. Approval depends on financial performance, customer credit, eligible collateral and existing obligations. Confirm that net-90 invoices remain eligible throughout the financing period.
Net-90 describes when payment becomes due under the agreed terms. It does not necessarily measure the time between your first production expense and the customer’s payment.
Consider an illustrative order:
Your initial cash has been committed for approximately 145 days.
The actual trigger may be invoice date, receipt, delivery or acceptance. Read the agreement rather than assuming the payment period starts when goods leave your facility.
Mehmi’s manufacturing and wholesale financing overview addresses the broader financing needs of industrial businesses. For net-90 customers, the first task is mapping the complete production-to-payment cycle.
Also distinguish 90 days outstanding from 90 days overdue. A valid net-90 invoice may still be within its agreed terms at an age that would indicate serious delinquency for a net-30 customer.
Calculate the largest cumulative cash shortage before collections arrive. Include overlapping orders, because the next production run may begin before the previous one is paid.
A useful starting metric is the cash conversion cycle:
Inventory days + receivable days − payable days.
Inventory days measure how long cash remains tied up in materials, unfinished production and finished goods. Receivable days measure collection time, while payable days reflect how long suppliers allow you to pay.
Suppose inventory takes 45 days to turn into a sale, customers pay in 90 days and suppliers provide 30 days of credit. The simplified cycle is 105 days.
That metric helps identify pressure, but it is not a complete loan-sizing formula. Payroll, supplier deposits, freight and different payment schedules require a dated cash forecast.
Prepare a weekly forecast covering the full cycle and at least one following collection period. A 13-week forecast alone may stop before a long production cycle produces its first receipt.
For an Alaska facility, use supplier quotes and actual shipping arrangements. Include inbound freight, storage and any cash required before materials reach the production floor.
Compare structures based on when financing becomes available and how it is repaid. A facility that starts after invoicing cannot automatically cover the earlier production period.
A revolving business line of credit may support recurring purchases and operating costs. Borrowing and redraws remain subject to the approved limit, conditions and renewal provisions.
Receivables-backed lending bases availability partly on eligible unpaid invoices. It may fit completed sales, but customer limits, invoice aging and deductions can reduce borrowing capacity.
Invoice factoring involves selling eligible invoices for an advance. Review fees, reserves, customer notification and obligations when payment is delayed or disputed.
Inventory-backed lending may support acceptable raw materials or finished goods. It should not be assumed to finance every item on your inventory report.
A working capital term loan provides an agreed amount with scheduled repayment. It may support a defined need, but installments can begin before the customer pays.
Mehmi’s business financing overview provides a starting point for comparing these categories. Ask each provider to explain which stage of your production cycle its facility can fund.
For recurring net-90 sales, also assess whether borrowing capacity can support several overlapping orders. One profitable order does not establish that the business can finance continuous growth.
Potentially, but the agreement must accommodate the terms explicitly. A customer’s right to pay in 90 days does not guarantee that the invoice qualifies under a lender’s collateral rules.
Ask whether eligibility is measured from:
For example, a hypothetical facility that excludes invoices once they reach 90 days from invoice date could create a problem just as a net-90 payment becomes due. Confirm how the provider handles that situation before relying on the advance.
Also ask about cross-aging. This means that overdue invoices from one customer can cause other invoices from that customer to become ineligible under the agreement.
The Office of the Comptroller of the Currency explains that receivable eligibility varies and that aging, customer concentration and credits affect collateral analysis. These are underwriting considerations, not a universal approval rule. Source: OCC Asset-Based Lending Handbook
Mehmi’s invoice factoring overview explains the general structure. For this use case, request a specific assessment of your customers and net-90 contracts.
Availability can change as raw materials become unfinished goods and later become invoices. This transition needs attention when borrowing depends on collateral.
Work in process means goods that are partly manufactured but not ready for sale. Their accounting cost may be substantial even when their resale value is limited.
A custom component that requires your machinery and expertise to finish may be difficult for someone else to sell. That can make it less useful as collateral than standard materials or completed products.
The OCC notes that work in process is frequently excluded from borrowing bases because it requires additional production inputs and has limited liquidation value. Source: OCC inventory collateral guidance
Ask the provider to model availability at three points:
If financing falls during the second stage, determine how the business will cover that gap. Do not assume a facility supporting inventory and receivables supports every stage between them.
A borrowing base is the amount supported by eligible collateral after agreed percentages and deductions. It can be lower than the advertised or approved facility limit.
Illustrative example: A manufacturer has a $300,000 revolving facility but only $250,000 of eligible receivables.
Assume a hypothetical 80% advance rate and a $15,000 reserve:
$250,000 × 80% − $15,000 = $185,000 supported borrowing.
If $120,000 is already outstanding, additional availability is $65,000, assuming no other restrictions.
Now suppose $50,000 of invoices become ineligible. Supported borrowing falls to:
$200,000 × 80% − $15,000 = $145,000.
With the same $120,000 outstanding, availability drops to $25,000.
The facility limit has not changed, but usable credit has fallen by $40,000.
These percentages are assumptions, not quoted terms. Request an availability calculation using your actual receivables, customer concentrations and existing balance before planning supplier payments.
The request should reflect cash expenses and collections across the entire order cycle. It should also show how financing costs affect the order’s remaining margin.
Illustrative scenario, not a client case or financing offer: An Anchorage manufacturer accepts a $300,000 order for fabricated components.
Before customer collection, the order requires:
Total modeled cash costs: $225,000.
The customer pays a $30,000 deposit, and the manufacturer contributes $45,000 without using its separate operating reserve.
The estimated order funding gap before financing costs is:
$225,000 − $30,000 − $45,000 = $150,000.
Assume the remaining $270,000 customer balance is collected after delivery and the agreed net-90 period.
For a simplified cost illustration, suppose $150,000 remains outstanding for 120 days at a hypothetical annual simple interest rate of 12%, using a 365-day year.
Interest: $150,000 × 12% × 120 ÷ 365 = approximately $5,917.81.
This assumes a constant balance, no fees and principal repayment at collection. Actual facilities may require earlier installments, variable interest or different calculations.
The modeled $75,000 difference between order revenue and listed cash costs falls to approximately $69,082.19 before unmodeled expenses and taxes.
A further 30-day delay adds approximately $1,479.45 of interest under those assumptions. It may also restrict financing for the next order.
Compare net proceeds, timing and total charges over the realistic financing period. Interest rate alone does not show whether the facility fits your cash cycle.
For a loan or revolving line, review:
For factoring, ask how charges change if collection takes 90, 105 or 120 days. Confirm whether fees apply to the invoice face value or the amount advanced.
Also review recourse obligations, which can require your business to repay or replace certain unpaid invoices. Non-recourse terms should not be assumed to cover quality disputes, returns or every cause of nonpayment.
Use Mehmi’s business loan calculator for scheduled loan-payment scenarios. Factoring fees and borrowing-base availability require separate calculations.
Prepare records that connect orders, production costs, inventory, invoices and collections. Consistent records make it easier to assess both repayment and collateral.
A useful package includes:
Explain customer deductions and credit notes. An invoice for $100,000 may produce less cash if returns, allowances or other offsets apply.
Identify ownership and location of inventory, including goods held by outside processors. The provider needs to understand what the business owns and where it is.
SBA-backed financing may be worth discussing when the business and proposed use meet current requirements. It is an option to assess through an appropriate participating lender.
The SBA’s 7(a) program permits short- and long-term working capital among eligible uses. Eligibility includes creditworthiness, reasonable repayment ability and other business and program requirements. Source: SBA 7(a) loans
Present the actual production timeline and customer terms. Ask how the proposed facility handles spending before invoicing and collections several months later.
Do not assume a government guarantee removes collateral review or makes a net-90 customer acceptable. The financing still needs to fit the transaction and the business’s financial condition.
The Alaska Small Business Development Center also provides business advising and resources that may help with forecasts and financing preparation.
Growth increases pressure when production spending rises faster than collections. Several good orders can consume cash simultaneously.
The Federal Reserve’s 2025 Small Business Credit Survey found that 46% of firms seeking financing cited expansion or a new opportunity, while 56% cited operating expenses. These national small-employer findings come from a convenience sample and are not specific to Alaska manufacturers. Source: 2026 Report on Employer Firms
Before accepting another large order, test the combined schedule. Include existing commitments, supplier payments and the possibility that the largest customer pays late.
A facility that comfortably finances one order may not finance three concurrent orders. Customer concentration limits can also prevent borrowing availability from growing in proportion to sales.
If the forecast becomes too tight, consider phased deliveries, deposits or production milestones. The objective is to make growth financeable before cash has been committed.
Sometimes. Focus on changes that reduce your cash commitment or remove avoidable approval delays.
Possible requests include:
Confirm that the customer’s purchasing and accounts-payable teams both recognize the agreed terms. A sales contact’s informal assurance may not change the payment process.
An early-payment discount can be another option, but calculate its dollar cost. A 2% discount on a $300,000 invoice costs $6,000; compare that with financing over the same period and the margin remaining on the order.
No. Overdue status depends on the contractual due date and the invoice’s payment trigger. However, a lender may apply separate eligibility limits based on invoice age. Provide both invoice dates and due dates, and confirm how the financing agreement treats longer customer terms before accepting an advance.
Potentially through an appropriate working capital or inventory structure. Standard invoice factoring generally requires an eligible receivable rather than a future sale. Explain the material purchase, production schedule and repayment source so the provider can assess the period before the goods are delivered and invoiced.
No. A purchase order supports evidence of demand, but the provider still needs to assess cancellation rights, production capability, costs and customer payment risk. Some purchase-order financing structures may not fit in-house manufacturing. Confirm eligibility before assuming the order itself provides access to funding.
Possibly, but existing security interests may restrict additional financing. Disclose the bank facility and its collateral coverage early. A new arrangement may require consent, refinancing or an agreement on priority. Do not assume the same invoices can support separate advances without coordination between the providers.
Available credit may fall, and the agreement may require repayment or other corrective action. The result depends on the facility’s terms. Ask the provider to demonstrate the effect of a delayed invoice on your actual borrowing base, including any impact on other invoices from that customer.
Start with the full timeline from supplier payment to customer collection. Separate raw materials, unfinished production and eligible invoices, then calculate the largest shortage across overlapping orders.
Call Mehmi Financial Group at 833-863-4644 or contact us to discuss your Alaska manufacturing business, net-90 customer terms and current financing eligibility. Have your receivables aging, inventory report, order budgets and existing debt schedule ready for a focused review.
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