Cash flow constraint is a common problem for apparel manufacturers, brands and wholesalers. Similar to the more well known Factoring service, Purchase Order Funding for apparel makers helps alleviate the cash flow concerns of growing business.
The manufacturing of apparel is capital and time intensive. As a result, it is difficult to manage cash flow during periods of heavy production. With apparel companies shipping multiple seasons, it’s important to manage cash flow properly. Purchase Order Funding for Apparel Companies is a great solution, as it provides access to capital for producing goods.
Purchase order funding gives apparel makers like you the ability to produce goods on time. Working with an Accounts Receivable Factor on the back end, PO funding provides the upfront capital needed to fuel production.
Additionally, you can pay your manufacturers quickly without turning to high interest funding options. In many cases early payment to your supplier can even lead to an additional one to three-percent discount. In conclusion, apparel companies can use PO funding as a tool to help manufacturers and brands deliver on time while avoiding cancellations.
Benefits of Purchase Order Funding for Apparel Makers
STAR Funding offers flexible PO funding options, helping manufacturers purchase the materials needed to successfully produce their apparel and deliver on schedule. For instance, Purchase Order Financing gives you a chance to complete a delivery without putting your company at risk of exhausting cash reserves. With a good purchase order financing partner you no longer have to worry about turning down larger orders. PO financing for apparel companies is also available for supply chains that are more complex, while Work-In-Process (WIP) Funding allows you to finance fabrics, trims and cut and sew as needed.
Working with STAR Funding
STAR Funding was founded in the heart of NYC’s Garment District by a former garment manufacturer in 1990. Today, we are the premier purchase order finance company for apparel manufacturers and importers. STAR has been providing factoring and purchase order financing to businesses in need of additional cash flow for more than 20 years out of our Manhattan office. We understand the ins and outs of the apparel business. Most importantly, the knowledgeable team will work with you to provide secure, cost effective PO Funding solutions that will position you for success.
- PO Funding is not a business loan
- The right lender gives you the ability to accept and deliver larger orders
- STAR Funding offers competitive rates and creative PO Funding solutions
Finished Goods Financing
Funding a PO for finished goods is the most common type of purchase order financing for apparel makers. Less risky, it involves the purchase of goods for resale that don’t require any assembly or customization prior to reselling.
Finished Goods Financing is highly preferable to typical short-term loans, as it typically comes with a much more favorable interest rate and turnaround time. Above all, this is our most popular type of funding for our manufacturing clients.
Work in Process (WIP) Financing
PO Funding for WIP involves purchasing components or raw materials. Most importantly, WIP is much more complex than finished goods financing because the risk is much higher. Additionally, the standard costs of work in process PO funding is greater.
However, work in process may not require 100% funding of raw materials. Therefore, the costs associated to the invoice may be significantly less than funding 100% of the finished product cost.
Apply for Financing with STAR Funding
If you’re looking to grow your business, STAR Funding can help. Providing you with flexible options, we offer multiple services—from financing finished goods to WIP—ensuring your needs are met in a timely and professional manner. Contact us today and learn how businesses backed by STAR are not just surviving—but thriving.