01 / Understand
The financing decision
Can production cash flow fund the real estate while maintaining equipment and working capital?
A light-manufacturing building can support production without itself creating the cash needed to repay a loan. Underwrite the operating company’s orders, margins and working-capital needs alongside the property purchase. Keep an unrelated landlord’s lease case separate. The preparation framework below focuses on the transition from orders to cash and the cost of keeping machinery productive; it is not a universal lender checklist.
Backlog must become produced, accepted and paid orders
Separate firm orders from quotations, cancellable demand and customer forecasts. Explain customer concentration, contractual acceptance, rejects/rework and collection terms. Build production around available labor, materials, qualified equipment and realistic yield. The financing case should identify what causes a shipment or invoice to become usable cash rather than treating the entire backlog as immediate repayment support.
Growing sales can consume the closing cash
OCC’s working-asset guidance examines the operating cycle from purchasing through collections. Apply that framework to the manufacturer’s own raw materials, work in progress, finished goods and receivables. Compare the timing with supplier payments and available credit; do not apply a generic advance rate. Show the property down payment separately from cash needed to fill orders.
Installed machinery and a working plant are different milestones
OSHA guidance identifies machinery safeguarding, anchoring and energy-control considerations. Qualified specialists should establish the applicable work during relocation or expansion. Translate their findings into installation, testing and downtime costs. Keep equipment liens and the building mortgage distinct; eliminate intercompany rent in combined cash while retaining external occupancy costs and all debt.
A hypothetical decision
Hypothetical: a new contract requires more inventory
A fabricator buys a larger plant after winning a major order.
The proposed building loan fits the annual profit forecast, but materials and payroll must be funded before customer acceptance and payment. Add relocation downtime and the existing equipment debt, then test whether remaining liquidity carries the order through collection.
The takeaway: A workable property loan must coexist with the cash cycle that produces its repayment.
Dedicated to light-manufacturing facilities
Download your niche underwriting package.
Use this dedicated Excel workbook with its lender guide and document checklist. Read the workbook instructions, replace illustrative assumptions with your evidence, and keep the guide beside your analysis.
Model scope and limitations
This model combines business and property cash, deducts listed business obligations, and tests the cash remaining for proposed property debt. It does not calculate standalone landlord NOI or establish lender-defined global coverage.
Receivable, inventory and trade-payable balances use current monthly sales/product costs times entered days divided by calendar days. Their signed changes reconcile accrual sales/costs to cash once. This simplified balance proxy is not actual aging, a borrowing base or proof of available credit. Replace opening balances with reconciled records.
Finished-unit demand is capped by available machine hours. Enter accepted units and material cost including normal scrap/rework; the model does not independently determine production yield or customer acceptance.
- All numerical values are illustrative; no market facts or lender approval are asserted.
- The twelve-month operating model omits taxes on investor returns and future refinancing costs except expressly entered items.
- Legal, licensing, environmental, engineering and lender-specific recognition require actual diligence.
Excel .xlsx · PDF .pdf · No email required. Preparation materials do not constitute a loan offer or a lender’s document requirements.
Package reviewed by Jason Taken ·
Next: gather your lender documents ↓Related core asset model
Compare the existing core workbook.
The scope below describes the related core asset workbook. The dedicated niche package above has its own instructions and limitations.
The Owner-occupied commercial property workbook can summarize supported combined cash and debt after a separate production forecast.
Model scope and additional analysis
It is not a plant-capacity, yield, inventory, borrowing-base or machinery-compliance model.
Prepare an additional schedule: Add order-to-cash, production/yield, working-capital and relocation/commissioning schedules.
Test property-level loan sizing · Check post-closing liquidity
Questions to prepare for a lender
Use these questions to organize a financing discussion. A lender sets its own credit requirements and determines which evidence applies to your transaction.
Which orders can the expanded plant deliver and collect?
Provide order terms, customer concentration, acceptance criteria, historical rejects and an evidence-based production ramp.
What working cash is needed before the first expanded shipment pays?
Schedule inventory, work in progress, receivables and supplier payments using the business’s own terms and seasonality.
References: OCC: Accounts Receivable and Inventory Financing
What must happen before relocated machinery earns revenue?
Obtain qualified installation/safeguarding scopes, vendor commitments and commissioning milestones; include overlap occupancy and downtime.
References: OSHA: Machine Guarding—General Requirements
03 / Prepare
Build your document checklist.
Check off what you have. Your selections stay on this page while it is open; they are not sent to Jaken Finance Group or analytics.
References: OCC: Accounts Receivable and Inventory Financing
References: OSHA: Machine Guarding—General Requirements
0 of 5 document groups marked ready
Print uses your browser’s PDF option. Checklist selections are for your preparation, not a lender’s completeness determination.
Continue the learning path.
Owner-user industrial relocation and double-occupancy costs
Build a monthly transition schedule for old rent, new property debt, moving costs and business disruption before financing an industrial relocation.
Owner-occupied debt: when no intercompany rent satisfies both entities
Test the operating company’s sustainable rent against the property’s standalone debt requirement before relying on strong global coverage.
Specialized equipment and real property value separation
Identify collateral value dependent on equipment or an operating business. Includes component collateral valuation evidence schedule.
Sources and applicability
The references support the specific points identified above. Preparation questions, checklists and hypothetical decisions are the publication’s analysis, not instructions issued by the source or a lender.
- OSHA: Machine Guarding—General RequirementsMachine guarding; Anchoring fixed machinery; Lockout/Tagout · Checked 2026-10-21
Supports identifying machinery safeguarding and installation responsibilities. Relocation costs and production sensitivity analysis are our suggestions, not OSHA lending requirements.
- OCC: Accounts Receivable and Inventory FinancingAssessing the Borrower’s Operating Cycle, printed pages 15–16; Evaluating Collateral · Checked 2026-10-21
March 2000 handbook with March 2025 reputation-risk edits. Supports examining cash conversion and working-asset collateral in this lending context. No advance-rate or lender-policy threshold is adopted; niche scenarios are our analysis.
AI-assisted research and preparation. Published by Jaken Finance Group. Reviewed by Jason Taken on 2026-10-21. Report a correction.