WHAT'S IN THIS GUIDE
Global retail apparel and footwear sales reached nearly 2 trillion U.S. dollars in 2019 and are expected to top 3 trillion U.S. dollars or nearly 3.8 trillion in Canadian dollars by 2030, according to Statista. To stay in the game in a competitive market, both large and small apparel companies need working capital to grow and maintain gaps in cash flow.
As in many other industries, apparel and textile companies often wait weeks or months before their invoices are paid, yet must continuously produce goods to meet market demands. This makes it challenging to maintain sufficient funds to facilitate consistent growth without incurring new debt.
Factoring for apparel companies provides a steady in-flow of cash for your business by leveraging your unpaid customer invoices.
Commercial factoring is a lifeline when slow-paying invoices stifle cash flow and working capital. It is a financing option that can also be the first step in gaining low-interest financing from CIT, Wells Fargo, and other banking institutions.
Providing top invoice factoring for small business, FundThrough automates the invoice factoring process, so you have the working capital to grow your commercial company.
Consistent cash flow is critical in the apparel and textile industry to purchase materials, make payroll, and pay ongoing business expenses. Factoring for apparel companies enables you to get the cash you need to grow—fill new orders, acquire new customers, and open new markets.
Invoice factoring works by advancing money you’ve already earned. Instead of incurring new debt via bank loans or lines of credit, passing credit checks, and jumping through hoops to get the funds your business needs, invoice factoring offers a simple, straightforward solution to grow your business.
FundThrough buys your selected invoices and advances the full invoice amount, minus a small fee. This provides fast access to cash. You can collect on your outstanding invoices now instead of waiting 30, 60, or 90 days for customers to pay.
Besides an influx of cash, apparel invoice factoring provides many benefits:
In the past, factoring was largely misunderstood. Business bank loans and lines of credit were the traditional and accepted forms of financing, along with credit cards. Each of these different funding options have pros and cons to consider.
Costs for a new or growing apparel business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan.
A line of credit (LOC) is a lot like a credit card. You can borrow/withdraw money up to a certain maximum amount determined by your financial institution. You can cover day-to-day expenses and pay back your debt, only to borrow again when needed.
Like all forms of funding, business credit cards must be used wisely or things can go sideways very quickly.
Invoice factoring for apparel companies is not a loan. The application process is quick, there is no repayment obligation, no high interest rates, and no debt to record on your company’s balance sheet. Plus, many more companies will qualify.
Choosing an apparel factoring partner is a lot like choosing any lender. It pays to do your homework. There are also several questions to ask prior to starting the application process:
Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries.
FundThrough works with apparel companies.
Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry.
FundThrough advances 100% off the invoice amount, less a fee.
A factoring company should be able to provide what factoring fees it charges upfront. But some companies may make it difficult to determine the total costs of using their service. FundThrough offers transparent pricing so you know prior to signing an agreement.
FundThrough Pricing – 100% advance rates minus a flat fee. One up front price.
A minimum is the amount you must factor every period (month, each quarter or every year). Some factoring companies offer plans that require minimums, while others do not.
FundThrough doesn’t require minimums. Only fund when you need to.
Cash flow is the number one problem for most start-ups and small businesses, especially if they’re growing. This is also true for apparel companies. Invoice factoring companies typically consider several situations before offering you an advance.
Factoring invoices is a sound financial strategy if you—
FundThrough takes the legwork out of accounts receivables financing. It’s fully automated platform is easy to navigate, it’s fee structure is transparent and a customer service rep is there when you have questions. Find out what FundThrough’s clients have to say, and start factoring your invoices today.
Interested in possibly embedding FundThrough in your platform? Let’s connect!