Key Insights
- A reshoring wave among manufacturers, fueled by supply chain concerns and federal incentives, is creating significant financing demand.
- Slow equipment financing timelines, now averaging 73 days, create an opening for community financial institutions to serve reshoring manufacturers.
- Community financial institutions that offer specialized lease structures and faster approvals can win manufacturing relationships over nontraditional lenders.
In the smash Broadway hit Hamilton, King George III sings “You’ll Be Back,” dismissing the colonists’ bid for independence as temporary. He assumes the new nation will eventually discover that it cannot thrive without the empire it left behind and return its loyalty to England. The audience knows he's wrong.
As the US marks its 250th anniversary this year, the song’s misplaced certainty offers an apt contrast to today’s reshoring movement. After decades of offshoring, US manufacturers are responding to supply-chain resilience concerns and federal incentives, such as tax breaks and subsidies, by building and expanding operations domestically — signaling renewed confidence in US manufacturing. For community financial institutions (CFIs), the resulting investment can create opportunities to finance facilities, equipment, working capital, and the local businesses that power manufacturing ecosystems.
Reshoring Drives Equipment Demand
Localizing production can give manufacturers greater control over disruptions that have become more common, from the COVID-19 pandemic to increasingly frequent natural disasters. Depending on their industry, manufacturers that reshore may also qualify for federal incentives. For example, Section 45X of the Inflation Reduction Act provides production tax credits for qualifying US-made solar, wind, battery, and inverter components, as well as certain critical minerals, subject to eligibility rules and scheduled phaseouts.
The investment implications are substantial. According to First National Capital’s 2026 Manufacturing CapEx Outlook report:
- 38% of middle-market manufacturers (those with $50MM to $1B in revenue) are reshoring production from overseas or have already done so
- Another 27% are actively preparing to reshore
- 60% plan to increase equipment investment in 2026
Yet financing may not be keeping up with that demand. The average time to close equipment financings has reportedly increased to 73 days, from 54 days in 2022. For manufacturers working to install production capacity, automate facilities or respond quickly to changing tariff and supply chain conditions, that delay can be costly.
This leaves room for CFIs, especially those with established manufacturing relationships, to help close financing gaps around equipment, automation, and broader facility modernization.
Specialized Structures Can Differentiate CFIs
Modern manufacturing facilities are more complex than traditional plants. Automation systems may include specialized software, smart conveyor systems, and robotics while a single production line can cost $2MM to $8MM. Larger facility overhauls can require considerably more capital.
That complexity can make underwriting more challenging. Credit teams may be well equipped to evaluate real estate and conventional C&I assets, but have less experience assessing the depreciation, useful life and secondary-market values of high-tech automation equipment. In response, some lenders may seek additional collateral or extend approval timelines, opening the door for nontraditional lenders that can move more quickly.
Traditional credit structures can also raise manufacturers’ overall capital costs. Customized lease structures, for example, may better reflect the changing nature of advanced manufacturing assets and can be less expensive than standard structures that add unnecessary collateral or do not match the equipment’s economic life.
To compete effectively, CFIs could consider a more specialized approach:
- Structure payments around the installation timeline. Offer equipment leases that keep payments lower while equipment is being installed and ramped up, then increase payments once the production line is operational and generating revenue.
- Match terms to the equipment’s useful life. Financing should reflect the realistic lifespan of high-tech automation assets, which may become obsolete more quickly than traditional manufacturing machinery.
- Bring in specialized valuation expertise. Third-party specialists can help assess complex machinery, projected depreciation and likely secondary-market values, supporting faster decisions without sacrificing risk discipline.
- Partner with equipment vendors. Vendor relationships can allow CFIs to present financing options at the point of sale, helping manufacturers secure capital when they are ready to make a purchase decision.
- Build manufacturing-specific lending capabilities. Commercial and credit teams that understand automation, equipment economics and manufacturers’ production cycles can respond more quickly and compete more effectively with nontraditional lenders.
CFIs that combine speed, flexibility and specialized manufacturing expertise may be better positioned to retain existing customers and win new relationships as reshoring accelerates. Those that rely solely on generic term loans and lengthy approval processes risk ceding both current and prospective manufacturing business to nontraditional lenders.
