The cash-flow challenge in apparel
Big-box retailers demand long terms and chargebacks while overseas mills want deposits before production.
Customers in this sector typically pay in 60–90 days from retailers. That gap is not a sign of a badly run business — it is simply how the sector trades, and it is why so many apparel companies hit a ceiling that has nothing to do with demand.
How purchase order financing solves it
PO financing pays your mills and cut-and-sew partners; AR factoring advances on retailer invoices after shipment.
PO financing is built for product businesses — distributors, wholesalers, importers and government resellers — that win orders larger than their working capital. It lets you say yes to growth instead of turning down the biggest contract of the year.
Because approval rests on your customers' creditworthiness rather than your own balance sheet, newer apparel companies and those rebuilding credit qualify on the same basis as established firms. Facilities run from $25,000 to $25 million and grow as your invoicing grows.
What apparel clients use funding for
- Production deposits
- Letters of credit
- Seasonal inventory
- Retail expansion
Who qualifies
- You resell finished goods (no heavy in-house manufacturing)
- Confirmed, non-cancellable PO from a creditworthy customer
- Gross margin of roughly 15% or more on the deal
- Reliable supplier with a delivery track record
What Apparel businesses need to apply
Applying takes about ten minutes. Most Apparel companies already have everything on this list, and nothing here affects your personal credit score.
- The confirmed, non-cancellable purchase order from your customer
- Your supplier's quote or pro-forma invoice
- A cost breakdown showing your gross margin on the deal
- Articles of incorporation and your EIN
- Supplier references or a delivery track record
Why it pays to move now
The cost of waiting is rarely just interest. It is the contract you could not staff, the order you could not fill and the supplier discount you could not take. Purchase Order Financing converts work you have already delivered into cash you can deploy this week.
