While largely justified, the word “debt” carries a negative connotation. However, in order to grow, businesses would sometimes need to take out a loan to be able to invest in necessary expenses such as purchasing additional equipment, bolstering marketing and advertising efforts, as well as buying commercial property for expansion. And, when it comes to restocking inventory, it’s no different. In this article, we will discuss the ins and outs of inventory financing as well as alternative financing options to keep your inventory stocked during peak sales periods. Let’s dive right in!

How can an inventory financing loan help your business?

An inventory financing loan is a type of asset-based loan that allows businesses to leverage their inventory to acquire a business loan. This type of business loan may come in the form of a short-term loan or a line of credit that businesses can use to purchase inventory. Usually, inventory loans are used by small to medium-sized businesses as a short-term financing solution to replenish inventory during spells of high consumer demand. If you’re wondering how an inventory financing loan can help your business, check out some of its advantages below:

• Provide the necessary funding for inventory purchases
• Easier to qualify for compared to other types of business loans
• Enables a business to prepare for busy shopping seasons
• Allows a business to use inventory as collateral
• Prevents stockouts

Factors to consider before borrowing money for inventory purchases

Nowadays, businesses have a plethora of financing loans to choose from. Depending on the purpose, business owners can pick and choose loans that are designed for a specific business expense. For instance, commercial loans exist so that businesses can acquire new property for expansion projects. But before deciding on which type of business loan to apply for, it’s important for businesses to consider the different factors involved when taking out a loan.

Do you have a business plan?

One of the most common requirements when applying for any type of business loan is a business plan. A business plan showcases how knowledgeable you are in your chosen industry as well as conveys your plans for growth. It also gives your lender an idea about the foundation of your business and how sustainable your operations are. Expect your potential lender to look at your projections as well as other relevant financial documents to gauge whether you have the funds to pay back the loan.

How much funding do you need?

Before applying for a loan, it’s important to identify how much you can afford to borrow as every business has its own complexities and unique needs. Think about the amount that you can afford, consider the monthly payment, and, most importantly, review the total amount you’ll end up paying back.

Know your credit score

Your credit score tells your lender how risky you are as a borrower. Most financial institutions look at a business’ credit history as the main metric when deciding your creditworthiness. Lenders also use your credit score to determine what interest rate to give you. Remember, the higher your score, the more favorable your interest rates will be.

Look for a nice balance between rates, terms, and fees

A loan with a low interest rate is great. However, borrowers should also consider the terms and fees that come with it. Make sure to find an interest rate with sensible payment terms. After all, choosing the lowest interest rate wouldn’t make sense if you’re going to repay it for a longer period, right? In addition, borrowers should also ask their lenders about hidden fees to avoid paying more than what they have bargained for.

How to apply for an inventory loan?

In order to secure an inventory financing loan, a business must be able to meet the following criteria:

• Must be in business for at least one year
• Must be a product-based business
• Must have a reliable inventory management system
• Must be able to provide accurate financial statements
• Must be able to prove that the business is profitable
• Must be able to provide information about credit history

Disclaimer: By no means is this a comprehensive list of requirements you have to meet to qualify for an inventory loan. Requirements and qualifications would vary from one lender to another. Please do your research!

Can I borrow money for my inventory purchases with bad credit?

The short answer is yes, you can. If you currently have bad credit, an inventory loan is one of the few loans that you may qualify for. Contrary to popular belief, it is still possible for businesses with poor credit to qualify for additional business financing in the form of an inventory loan. The only downside is that lenders have full authority to take possession of your inventory if you become unable to pay back your loan. This standard practice is in place to protect lenders in case a borrower defaults on a loan.

What are the different inventory financing business loans?

There are two main types of inventory financing: an inventory term loan and an inventory line of credit. An inventory loan is granted as a lump sum while an inventory line of credit is offered as a revolving fund that can be accessed again as needed. But, unlike a line of credit, a borrower that has used all the funds from an inventory loan may need to go through the entire application process again to be able to get another round of funding.

What makes an inventory loan attractive to businesses is the accessibility it offers. Both types of inventory financing business loans help small to medium-sized businesses provide better customer experience by keeping their most popular items in stock during peak shopping seasons.

Alternatives to an inventory financing loan

Note that inventory business loans are just one way to finance inventory purchases. If you don’t think an inventory financing loan is right for your business, you should also consider:

Merchant cash advances

A merchant cash advance is a financing option that involves lenders granting cash advances to businesses in exchange for an agreed-upon percentage of future credit card sales. The advanced amount, payment terms, and factor rates are typically discussed and decided by the borrower and the lender before the cash advance is approved.

Business credit cards

A business credit card, like a line of credit, enables small businesses to access a revolving fund with a set limit. Before considering a business credit card, it’s important to note that since business credit cards are usually unsecured (which means they are not backed by collateral), it may come with higher rates and fees.

Crowdfunding

Crowdfunding is a method of raising money to finance projects and business ideas. Businesses that need capital may collect money from a large number of people through the use of third-party online crowdfunding platforms. This method lets businesses tap into a wider investor pool and enjoy a more flexible way to raise capital. If you’re seriously considering crowdfunding to fund your inventory financing needs, you should check out Kickfurther.

Can Kickfurther be a great option for inventory funding?

If you have exhausted other financing options, Kickfurther can be a great way to acquire additional funding for your inventory needs. Kickfurther is an online inventory funding platform that provides businesses the necessary funds that they cannot access through traditional sources. Kickfurther applies a unique twist on the crowdfunding phenomenon by inviting individuals to become backers whenever a business needs to replenish its inventory.

Individuals looking to earn money may choose which business to send their money to and how much money they are willing to give. The business will then offer a rate of return and a specific repayment period to the buyers. After an agreement has been made, businesses are required to submit sales reports and present accurate documentation that details the payment for each individual for every inventory sold.

Wrapping Up

When studying different business loans, the best tip that we could give you is to shop around for the most favorable rates possible. However, don’t focus too much on the interest rate. Rather, find the sweet spot between a reasonable interest rate and a convenient repayment period. At the end of the day, taking out a loan is a huge financial decision – wouldn’t you feel more accomplished if you have done everything you could do to get the best possible deal for you and your business?

Did you know that there are several startup financing options available to different kinds of businesses? After all, even the most successful companies struggle with poor cash flow from time to time. Without sufficient cash flow, businesses are forced to cut costs which could limit their growth opportunities.

As a business owner, wouldn’t it be great to have some sort of financial cushion that can be used to purchase additional goods to meet customer demand? The good news is that there are easily obtainable loans out there that businesses can access at any given time. One of them is inventory financing.

What is inventory financing?

Inventory financing is an asset-based loan simply based on the value of your inventory. This type of short-term financing enables businesses to use their inventory as leverage in getting either a term loan or a revolving line of credit. Inventory financing is often used by small to medium-sized businesses to support them through seasonal cash flow fluctuations while also ensuring that their most popular items are always on stock.

When applying for an inventory financing loan, one of the most important things to take into account is your inventory’s loan-to-value (LTV) ratio. As a rule of thumb, most lenders set an LTV of 50% to inventories pledged as collateral. For example, if the appraised value of your asset is worth $100,000, chances are you would be eligible to borrow a loan amount of at least $50,000.

What type of startups require inventory financing?

As mentioned above, most businesses use inventory financing as a short-term solution to cover poor cash flow. More often than not, these businesses deal with large inventory quantities which could form a significant part of a company’s current assets. This financing approach is suitable for businesses that experience high inventory turnover rates such as retailers, restaurants, distributors, wholesalers, and manufacturers.

Is inventory financing right for your business?

The best person to ask is… you! As an entrepreneur, it is important to have an understanding of the various financing options you can avail of in case your business becomes strapped for cash. Any kind of business, regardless of size, will experience cash flow issues at one point or another. Thankfully, an inventory financing loan would help cover your inventory procurement needs so that you won’t have to spend money allocated to other important operating expenses such as payroll, rent, and utilities.

If you’re still wondering whether inventory financing fits your business’ current needs, ask yourself the following questions:

• What’s your inventory turnover rate like?
  • It may not be advisable for companies with a low inventory turnover rate to avail of an inventory financing loan as the repayment period is usually shorter compared to other forms of business loans. If it takes a while for you to sell your goods, an inventory loan may not be the best business loan for you.
• Do you have a great inventory management system in place?
  • Having a great inventory management system in place would not only help your chances of getting an inventory financing loan but would also speed up the application process. One big downside to applying for inventory financing is the amount of time it takes to appraise a company’s inventory. If you already have an efficient system in place, chances are the review and approval process would be much quicker.
• Are you looking for a short-term or a long-term financial solution to your cash flow needs?
  • Again, it’s important to remember that an inventory loan is mainly used as a short-term financing solution. Compared to a typical business loan, lenders may instruct borrowers to pay off their inventory loans over a shorter period of time. This means larger monthly payments that could do more harm to your cash flow than good. To avoid this, make sure to identify a loan amount that is within your means.

What should you look for in an inventory financing company?

It’s probably safe to assume that you’re here because you have been researching the ins and outs of inventory financing. If you think inventory financing is right for you, then it’s time to talk about what you should look for in a potential lender. At the end of the day, you only want to get the best deal possible from a reputable financial institution, right? To determine whether or not an inventory financing is right for your business, here are two important factors consider:

Reputability

According to a 2014 Ernst & Young survey, respondents said reputation plays a “very important” role in deciding whether or not to trust a financial service provider. A financial organization’s reputability shows you – the customer – that they can be trusted with your current financial requirements and, in the long run, the financial well-being of your company.

Fees and Interest rates

Does your potential lender offer competitive interest rates? Do they have reasonable fees associated with a startup business financing loan? When it comes to significant financial decisions, it’s only natural to prioritize how much you’ll pay in fees and interest rates as it would take a sizable portion from your profits. Fees and interest rates would also give you an idea if you can afford to take out a loan.

What are the different types of funding for startups?

The truth is, startup funding may be difficult to come by. The main reason why is that startups are considered “risky” by most financial institutions. According to the U.S. Bureau of Labor Statistics (BLS), 45% of new businesses fail during the first five years of operation. The biggest reason why they fail? Insufficient funding.

To ensure that does not happen to your startup, let’s check out the different types of funding available for you and your business.

Term loans

A term loan is simply a loan from a financial institution with a fixed repayment schedule. Startups borrow a lump sum from a lender and then pay the full amount back in steady increments over a set payment period. As one of the most common forms of business loans, a term loan can be a reliable funding option for startups. However, traditional term loans may be difficult to qualify for.

Lines of credit

A business line of credit works best if your business needs regular access to extra capital. Usually, lenders allocate a specified maximum amount of funding and borrowers can draw cash as they see fit and only pay interest on the borrowed amount – not the total amount available.

Business credit cards

A business credit card enables business owners to access a revolving line of credit in order to fund various business expenses. Like personal credit cards, a business credit card will also charge interest rates if the balance is not repaid each billing cycle. Keep in mind that business credit cards would most likely carry higher interest rates compared to other more traditional business loans.

Online loans

Unlike conventional funding options like term loans and lines of credit, online loans are not provided by traditional financial institutions such as banks and credit unions. Rather, online lenders specialize in more convenient and accessible funding for small to medium-sized businesses. While chances of approval, interest rates, and payment terms vary from one lender to another, online loans are generally easier to qualify for. However, expect higher than average interest rates as online loans are usually unsecured.

Crowdfunding

According to Investopedia, crowdfunding makes use of an online network of individuals to raise the necessary capital for businesses to expand or fund a new venture. Instead of taking out a bank loan or a line of credit, businesses can use crowdfunding by asking a large group of people for small amounts of money to meet a certain monetary goal. For a crowdfunding effort to succeed, companies must properly plan their strategy to capture the attention of their potential backers.

If you’re looking for a crowdfunding platform that would specifically address your inventory needs, you should explore KickFurther.

KickFurther applies a unique twist on the crowdfunding phenomenon by allowing businesses to scale their inventory expenses with the help of their community of backers. This innovative platform works best with businesses that are experiencing low cash flow but strong demand. This enables them to crowdfund from people that are interested in their product and, when the business sells its inventory successfully, investors get paid. For more information, visit Kickfurther’s website at www.kickfurther.com.

Crowdfunding Your Inventory: The Pros and Cons

As with any startup financing option, crowdfunding also has its own pros and cons. Let’s take a look at the benefits and drawbacks of crowdfunding to help you determine if crowdfunding is right for you.

Pros of Crowdfunding

• Increased exposure for your company and your products
• Tap into a larger audience
• No equity – you maintain full control of your company
• Timely access to funds (as long as the fundraising attempt is successful)

Cons of Crowdfunding

• Always a risk of failure
• Crowdfunding is rife with scammers
• Takes a lot of time and resources to ensure success
• Someone could steal your business idea (especially if your idea is not protected with patents)

Final Thoughts

While it’s true that most startups usually fail within the first five years, it doesn’t mean that it will happen to you. It’s important to understand that success would not happen overnight. The best course of action to take is to map out your business goals and strategically plan for your growth. It also helps to have enough knowledge about the different startup financing options you can avail of in instances where you’re looking to expand or need extra funds to cover unexpected expenses. It may be a painstaking process but if it’s for the success of your startup, it’s definitely worth it.

Not having enough cash on hand can hurt any kind of business. Even the most successful businesses are known to encounter a shortage of cash due to unforeseen circumstances. Business owners then turn to bank loans, lines of credit, or credit cards to cover their day-to-day operations. However, defaulting on these loans can severely impact a business’ credit score. Fortunately, if your business mainly deals with the sale of tangible goods, an inventory financing loan may help cover short-term needs with little risk.

What is inventory financing?

Inventory financing is a form of asset-based lending that enables businesses to pledge their inventory as collateral to be able to obtain a term loan or a line of credit. Through inventory financing, a business experiencing poor cash flow can acquire a much-needed cash injection to cover outgoing cash flow instead of waiting for inventory to be sold. The difference, however, is that a term loan involves a one-time payment while a line of credit can be accessed, paid, and accessed again as long as the borrower consistently pays the amount that they have borrowed.

When it comes to inventory financing, it’s important to bear in mind that your loan does not solely rely on the value of your assets. Rather, it depends on the loan-to-value (LTV) ratio set by your potential lender. An asset’s LTV is calculated by dividing the amount borrowed by the appraised value of the property being put up as collateral. As a rule of thumb, most lenders set an LTV of 50% to inventories pledged as collateral. This means that it is highly unlikely that you would get the full appraised value of your inventory when you apply for inventory financing loans.

What are the different types of inventory financing?

In this section, we’ll talk about the two main types of inventory funding to determine which one best fits your business’ current financial requirements.

What is an inventory loan?

This type of inventory funding is characterized as a short-term loan that businesses use to purchase additional inventory. An inventory loan comes in the form of an upfront lump sum that businesses have to pay based on the payment terms set by the lender. Businesses experiencing rapid growth and an increase in market demand should consider an inventory loan as it is often easier to acquire as opposed to other kinds of loans. However, business owners must remember that an inventory loan is often used as a short-term solution.

Compared to other business loans, inventory loans are repaid over a shorter period meaning larger monthly payments. Another downside of an inventory loan is that it’s a one-time payment. If you need another loan, you would have to go through the application process again.

What is an inventory line of credit?

Like other lines of credit, an inventory line of credit can be accessed by businesses to buy the inventory they need when they need it. A line of credit’s repayment terms differ from a term loan as you only pay interest on the amount that you have borrowed and not the total amount available. What sets an inventory line of credit apart from an inventory loan is when used properly, a business will be able to manage its cash flow better and reinvest the additional capital back into the business. But, like an inventory term loan, an inventory line of credit typically has interest rates that are much higher compared to other more traditional loans.

The Benefits and Drawbacks of Inventory Financing

As with any important financial decision, business owners must understand the different advantages and disadvantages of inventory financing for you to make an informed decision. Let’s talk about the pros and cons of inventory funding.

Inventory Financing Benefits

• An inventory financing loan could be a short-term solution for a business’ cash flow problems.
• Businesses can use inventory financing loans to expand product lines.
• An inventory financing loan allows a business to stock up on inventory – getting ahead of potential inventory issues.
• May be easier to qualify for since an inventory financing loan requires a borrower to pledge collateral.

Inventory Financing Drawbacks

• An inventory financing loan requires an extensive due diligence process which can be as expensive as it is time-consuming.
• Depending on the lender, an inventory financing loan may have high interest rates and high loan minimums.
• Inventory loans can only be used to buy additional inventory and cannot be used for other purposes. For instance, you cannot use an inventory financing loan to consolidate debt, pay your employees, or cover other cash flow needs.
• An inventory loan is collateralized by your inventory – this means that the lender can seize your inventory in case you default on the loan.

Who can use inventory financing?

Inventory financing, as the name implies, can be used by businesses that deal with tangible products. These include retail stores, wholesalers, distributors, and manufacturing companies that experience high inventory turnover rate. For a business to enjoy the myriad of inventory financing benefits, they must first meet the following criteria:

• Must be operational for at least one year
• Must be a product-based business with a reliable inventory management system
• Must provide relevant and accurate financial statements
• Must prove that the business is profitable
• Must provide credit history and scores

Is inventory financing right for your business?

As the business owner, you would be the best person to gauge whether or not acquiring an inventory business loan would help meet your business goals. In general, inventory financing loans are sought after by small to medium-sized businesses that have exhausted other options to acquire additional funding. Larger companies with an established financial history would be better off with traditional bank loans that offer more favorable repayment terms as opposed to an inventory financing loan. Remember, the loan you’re applying for should depend on the type of business you have and what you’re looking for to accomplish.

Are there other alternatives?

Insufficient capital is one of the many roadblocks that business owners face when running a business. The great news is, depending on your business’ qualifications, you may be eligible for other types of financing that may be more favorable for your current financial requirements. Let’s check out some of the alternatives to inventory financing.

• Traditional term loans – A term loan is a funding option offered by financial institutions such as banks, credit unions, and online lenders. What makes term loans popular is their predictable monthly costs as businesses can borrow a fixed amount of money and pay it back with interest over a set period of time. While it’s available to both start-ups and established businesses, term loans may be more difficult for small businesses to acquire if you have bad credit or poor cash flow.
• Traditional lines of credit – Like term loans, traditional lines of credit are also offered by banks, credit unions, and online lenders. The great thing about this type of funding is that a revolving line of credit can be accessed and repaid either immediately or over time. Payment is also straightforward as you only pay interest on the amount that you take out rather than the whole available amount.
• Business credit cards – While it’s true that this kind of financing may be easier to qualify for compared to other traditional financing options, business credit cards do not have the most flexible payment terms. The biggest advantage that credit cards have is that every purchase helps the borrower earn rewards, points, or cash back depending on the type of credit card that they have.
• Angel investors – Angel investors are high-income individuals that provide the necessary funding for businesses in exchange for an ownership stake in a company. These individuals typically invest in a startup during its early stages – using their own money.
• Crowdfunding – Crowdfunding is a relatively new method used by businesses, organizations, or even individuals to fund a business idea or an expansion project. Crowdfunding asks a large number of people, often friends, family, customers, and the general public, to donate their own money during a set period of time. Once the goal amount is met, businesses can take out the amount raised and use it however they want. If you’re interested in financing your inventory through crowdfunding, consider using Kickfurther.

How does Kickfurther help small businesses finance their inventory?

Kickfurther is a unique crowdfunding platform that helps businesses grow their inventory through fundraising efforts backed by the public. It is the first crowdfunded marketplace with the main objective of financing a company’s inventory needs. Kickfurther enables a larger and more cost-effective inventory production by enabling a true consignment inventory from people that support and believe in your brand and your product. If you think Kickfurther is the right financing option for you, learn more about their services by visiting www.kickfurther.com.

Key Takeaway

An inventory financing loan, if used properly, can be a great way to cover your business’ short-term funding needs. Make sure to shop around and study the different loan amounts and interest rates that you are able to qualify for to determine which type of loan makes the most financial sense for you and your business.

Thinking about starting a clothing brand? Or are you looking for new growth strategies? After all, just how difficult could it be? Whether you’re a seasoned veteran or a complete newbie in the fashion industry, operating a competitive brand is an all-consuming process. As with any other business, starting your very own clothing line presents a plethora of challenges that could make or break your business. The key, of course, is preparation.

From the get-go, it’s important to recognize that starting and growing your business can be an exciting yet extremely challenging opportunity. Thankfully, there are some steps that you can take to ensure that you are well-prepared to tackle all the challenges that would come your way.

Have a Strong Business Plan

Are you currently googling “how to make a business plan for your clothing brand” without actually looking into your business first to determine what you need? Unfortunately, this is a common mistake that all business owners make. Before developing a business plan, ask yourself the following questions first:

• What are you planning to achieve?
• What is your clothing brand’s purpose?
• How are you going to achieve your business goals?
• Do you have the means or the financial backing to support your plans for growth?

Whether you’re just starting out or exploring new ways to grow your clothing brand, your clothing brand business plan is an important tool to help guide you when making critical business decisions. Bear in mind that the fashion industry can be quite erratic – make sure that your business plan is conclusive enough to keep you on track of achieving your goals but also flexible enough to be able to adapt to an ever-changing industry.

A business plan would be able to help your business if you’re trying to secure additional funding. In fact, one of the most common requirements when applying for clothing store loans is a business plan that explicitly lays out your growth plans as well as the amount of financing you need to achieve them. Presenting your business plan gives your potential lender an overview of your plans and enables them to find the right loan product that would best meet your current financial needs.

Create a Brand Identity

Developing your own brand identity is of utmost importance now that more and more consumers are paying attention to brands and how they conduct their business. Not to be confused with branding, brand identity is – simply put – what makes a company stand out. Brand identity is the individual elements that form part of your overall brand. These include your brand’s name, your logo, and the colors and shapes associated with your brand’s image.

What makes brand identity so vital is that it helps set you apart from the competition. It is a culmination of several visible elements that you want your brand to be associated with. What’s your brand’s personality like? How about the tone of your messaging? What are your values? Ultimately, your company’s brand identity must be able to answer these questions in order to build a reputation that resonates with your potential customers.

Choose a Niche

Now that you have a business plan and a clear strategy to develop your brand identity – what’s next? Another common mistake that many small businesses make is selling a wide array of products to try and appeal to a broader audience. Not only is this unsustainable, but it may also present issues to your brand identity as you would have a more difficult time standing out in a congested industry. Choosing a niche market allows your clothing brand to avoid excessive competition by claiming a small slice of a large pie.

However, it’s important to note that having a well-defined niche is not enough to guarantee success for your business. As the business owner, you should equip yourself with the necessary knowledge to understand the niche that you would be operating in. Once you become an expert in your field, it’s easier to acquire more customers that are interested in your niche product. One great thing about choosing a niche is that after building and improving your reputation, you can gradually introduce new products that are consistent with your company’s brand identity.

Manufacturing Your Products: Get the Best Price from Suppliers

Suppliers play a vital role in the success of your business. From sourcing raw materials to helping you develop a great product, expect to work closely with your suppliers to ensure the quality of your clothing line. Keep in mind that getting the best deal from your suppliers does not necessarily mean negotiating the lowest possible price. Rather, other factors such as payment terms, product quality, and logistics should also be taken into consideration. After finding the right supplier, the next thing you have to do is to nurture your relationship with them. Properly managing supplier relationships fosters better communication, loyalty, and customer service.

Develop a Robust Financial Plan

Financial planning, as the name implies, is the process of allocating the necessary funds to determine how a business will achieve its short-term and long-term business goals. As mentioned above, the clothing industry can be unpredictable. It only makes sense to develop a financial plan that enables you to monitor your progress and adjust your expenses to stay on top of your spending especially during low revenue periods.

A well-thought-out financial plan takes into account cash flow fluctuations during slow seasons and suggests spending adjustments to better manage incoming cash flow. In the long run, a robust financial plan will help your business manage your finances better and ensure that your clothing brand stays afloat.

Financing Options for Your Clothing Store

As the old adage goes, nothing ventured, nothing gained. Growing your clothing store, at one point or another, means you would have to take risks. One such risk means borrowing additional funding in order to reinvest back into your clothing brand. Educating yourself about the different financing options available for your clothing store could help you get ahead of the competition and help you stay competitive in an ever-changing industry. Here are some of the financing options you should consider:

• Term Loan – A term loan is when a lender provides a lump sum to a borrower and the borrower agrees to pay that money back in steady increments over a fixed period of time. Term loans typically have fixed interest rates which makes it easier for businesses to calculate monthly payment costs.
• Line of Credit – A business line of credit, or revolving line of credit, is another funding solution that clothing brands can explore. Simply put, a business line of credit is similar to having a credit card. Your lender sets a limit to the credit line and you only pay interest on the amount you have borrowed, not the total amount available.
• Online Lenders – Loans provided by online lenders usually have a faster application process compared to traditional financial institutions like banks and credit unions. The reason why is that online lenders allow borrowers to go through a pre-qualification process that would determine the different interest rates and terms that they would be able to qualify for – significantly shortening the process. Borrowers, based on their creditworthiness, can then pick and choose the loan terms that would best meet their current financial needs.
• SBA Loans – The Small Business Administration (SBA) is a government-affiliated organization that provides businesses with low-cost loan options with reasonable payment terms. For instance, the SBA 7(a) loan enables small businesses to apply for additional funding that can be used for essentially any business purpose. The only downside is that not all businesses would be able to qualify for SBA-backed loans.
• Crowdfunding – Crowdfunding is a method of raising capital by asking a large number of people to donate money during a set period of time. Donors contribute their own money to reach the total amount required for a new business project or venture. If you’re thinking of using crowdfunding to raise the necessary capital for your clothing brand – try Kickfurther.

Kickfurther puts a twist on the crowdfunding phenomenon by asking backers to fund a company’s inventory in exchange for a consigned rate. This innovative platform helps grow your business by receiving financial support from people that want to see you achieve your goals. In doing so, a business would not have to go the traditional route of applying for loans from traditional financial institutions. It’s also important to note that Kickfurther works best with businesses that have low cash flow but is currently experiencing strong demand. If you think Kickfurther fits your current requirements, make sure to visit Kickfurther’s website at www.kickfurther.com.

Why should I consider inventory financing for my clothing brand?

Due to the nature of the clothing and retail industry, you would most likely encounter seasonal cash flow fluctuation. Many businesses use apparel inventory financing as a short-term funding solution to help cover emergency expenses during periods of low demand. An inventory financing solution would help businesses prepare for peak seasons without having to worry about getting additional funding that might hurt their finances in the long run. Another great thing about inventory financing is that it can be paid off within weeks or a few months – depending, of course, on how quickly you sell your inventory.

Final Thoughts

By no means is this a comprehensive list of the things you need to keep in mind to ensure success for your clothing brand. However, it’s a solid start. As your clothing brand becomes more and more stable, you can start looking into expanding your product lines, finding new niches, and beefing up your marketing strategies to appeal to a wider audience.