Factoring and the Apparel Industry: Part 2
In part 1 of our series, we looked at how the apparel industry has changed and how the right kind of financing can make or break an apparel business. Now we’ll explore some of the reasons why apparel companies seek financial support from a factor like Bibby Financial Services instead of going to a bank.
Cash Flow Lender vs. Collateral Lender
Bibby Financial Services is not a bank, and a factoring facility is not a loan.
Banks are predominantly cash flow lenders; they lend money to businesses that have already proven they are able to create and sustain their own cash flow and are therefore able to pay back the bank with interest. Banks typically do not lend money to startups or companies that are loss making.
Bibby Financial Services is a collateral lender; we advance funds based on a company’s collateral. In apparel factoring, the collateral is the company’s invoices. We purchase the invoices, essentially freeing the cash tied up in accounts receivable and pumping it back into the business. BFS will not only finance qualifying startups and companies that are loss making but can also provide additional services such as seasonal over advances and purchase order finance, based on the business’s collateral. This is how we can help apparel companies through those periods when they don't have a large volume of invoices to fund but have purchase orders, inventory, or other collateral.
Why Our Apparel Clients Choose Us
Our apparel clients appreciate that we perform credit checks on their customers, providing them with the information they need to determine how much volume they should have out to a customer at any given time. Additionally, our dedicated Account Executives and Collateral Analysts work closely with our clients and their customers to maintain and monitor account performance; inconsistencies in customer payments and other negative trends are picked up quickly and monitored. Traditional mall retailers and department stores as a group are struggling, so it is important that our apparel clients know how their customers are performing; insight from those close to the account can be crucial in helping to identify a retailer that may be on its way out.
Another benefit of being a BFS client is our global network; we have operations in 14 countries including several offices throughout the United States and Canada. Many larger apparel companies are selling internationally, but most domestic factors are unable to fund foreign receivables. With our global capabilities, Bibby Financial Services has no such restriction. Whether you’re shipping pencil skirts to Paris or vests to Vancouver, we’ve got you covered.
Finally, and most importantly, our clients choose us because we put them first. We don’t believe that your business must fit our product; we structure our product to fit the needs of your business. When you choose Bibby Financial Services to fund your business, your success becomes our goal. It’s why we say, We Believe in Your Business.
To learn more about Bibby Financial Services and how we can help your business, contact us today at firstname.lastname@example.org or at 877.882.4229.