A medium-sized clothing manufacturer had secured contracts with several large retail chains and boutique shops. Business was booming, but they faced a significant challenge: long payment terms. Many of their clients were taking 30, 60, or even 90 days to pay for their orders, creating a strain on cash flow. Meanwhile, the manufacturer had to cover the upfront costs of raw materials, production, and labor to fulfill these orders.
To avoid production delays or missing opportunities, the company turned to Factor & Fund for a solution.
The Problem: Delayed Payments and Upfront Costs
The company found itself in a situation where it was continuously producing garments but struggling to meet operating costs due to delayed payments. With their clients holding payment for up to three months, the manufacturer often had to wait to restock fabrics, make payroll, or manage overhead costs.
Traditional bank loans weren’t an option, as they often came with lengthy approval processes and rigid terms. The company needed a fast, flexible solution to maintain steady cash flow.
The Solution: Invoice Factoring for Clothing Manufacturers
Factor & Fund provided a way to stabilize cash flow through invoice factoring. The process was straightforward and designed to address the manufacturer’s needs:
- Submit Invoices: After delivering their clothing orders to retailers, the manufacturer submitted the unpaid invoices to Factor & Fund.
- Immediate Cash Advance: Within 48 hours, Factor & Fund advanced up to 90% of the invoice value, giving the manufacturer the funds they needed to keep production running smoothly.
- Final Payment: When the retailers paid the invoices on their original terms (30, 60, or 90 days later), Factor & Fund returned the remaining balance to the manufacturer, minus a small factoring fee.
The Outcome: Cash Flow Stability and Business Growth
With invoice factoring, the clothing manufacturer was able to keep its operations steady and expand its business, without worrying about long payment cycles.
- Improved Cash Flow: The company could now cover day-to-day expenses such as material purchases, wages, and utility bills, without waiting for clients to pay.
- No Additional Debt: Unlike loans, factoring doesn’t add debt to the balance sheet. The company accessed working capital without the burden of interest rates or monthly payments.
- Growth Opportunities: With reliable cash flow, the manufacturer was able to take on new clients, scale production, and invest in new designs and marketing campaigns.
Client Testimonial
“Invoice factoring with Factor & Fund saved us from the cash flow crunch caused by delayed payments. Now, we have the cash we need to cover production costs and keep growing our business without stressing over payment delays.”
– Owner, Clothing Manufacturing Company
Why Choose Factor & Fund for Clothing Manufacturers?
- Quick Cash Access: Get up to 95% of your invoice value within 48 hours, ensuring you can cover production costs and keep up with demand.
- No Debt: Factoring provides funding without adding debt to your business, giving you peace of mind.
- Tailored for the Industry: Factor & Fund understands the cash flow cycles of the clothing manufacturing industry and provides customized financing solutions that fit your business needs.
If your clothing manufacturing business is struggling with delayed payments, let Factor & Fund help you maintain cash flow and grow without delay. Contact us today or visit factorandfund.com to learn more about how our invoice factoring solutions can work for you.