The behemoth textile, garment and apparel industry comprises the lion’s share of all factoring receivables across the globe, as much as 59 percent according to a recent report by the Commercial Financing Association (CFA). This stems from a long history entwining accounts receivable factoring, factoring receivables and the garment industry going back thousands of years. Yet those new to the garment industry may not be aware of how large a role factoring apparel industry actually is.
Those who enter the world of clothing and fashion likely have an eye for style and design, but they may not be savvy about the world of financing textiles. Yet securing these clothing, apparel and textile loans is essential to turning those design patterns into realities. For a designer’s signature clothing line to end up being manufactured, shipped and sold in retail stores across the U.S., a lot of behind the scenes work needs to take place.

Textile Loans to Finance a Fashion Designer Dreams

To turn their paper or computer-generated sketch into a piece of sellable clothing, designers must work with manufacturers, usually independent firms or contractors, to have the garments cut, sewn, adorned and otherwise put together. Yet even before this process occurs the raw materials, fabric pieces, threads, fasteners and more must be sourced, which costs money. New clothing designers must generally pitch completed sample garment pieces to retail buyers. This small-scale production process is generally outsourced to create the samples. Factoring textiles and apparels is essential to get this work started even before mass manufacturing begins.

Learn as You Go for Factoring Apparel Industry

Financing is still needed up front for materials sourcing and procurement even though the collected payment won’t be available until several weeks later when the final product is shipped and sold to the retailer. Most traditional banks won’t touch financing apparel industry because it has slim margins and a long time to wait to get paid. As using apparel factoring is the standard in the industry, those new to fashion and clothing manufacturing should get acquainted with factoring textile services as this is most likely the way they will secure financing for their enterprise. Those who enter the multifaceted sector of fashion, design, clothing and apparel manufacturing may have little knowledge of apparel financing industry but before long, they are likely to become experts on all things related to financing textiles and apparels.