How to Finance Your Textile Company
The textile industry has a lot of challenges. You have to stay up on current technology and trends. You must anticipate what people will want in the future. You also need to find a way to fund your business, which isn’t always easy. Textiles industry financing can be hard to secure sometimes. Luckily, you have many options from which to choose.
Cash Advance
One option that is helpful in a pinch is a cash advance because it is easy to get. You can find different types of advances, but one common one is an advance on your credit card sales. You secure a loan against future sales and when you make credit card sales, you then pay back the loan. This is a short-term loan, and you will pay a high interest, so it is often the last resort option.
Alternative Loan
Another option if you need a fast loan that is easy to get is an alternative loan. You do not usually need a high credit score or have a hugely profitable business to get this type of textiles industry financing. Terms generally run from one to five years. Interest rates range from nine to 16 percent on average.
Conventional Bank Loan
The best financing option is a conventional bank loan. However, these are not easy to get because you must have good cash flow, show a great return on investment, have a high credit rating and usually offer some collateral. You will get the best possible terms and rates with terms running from one to 25 years and rates ranging from five to 10 percent.
SBA loan
If you need some help qualifying for a conventional loan, you could try an SBA loan. This is where the Small Business Administration partially guarantees your loan. This lowers the lender’s risk. Terms for these loans often run from seven to 25 years with rates at six to eight percent.
Special Loans
There are also some other special loans that you may use for different situations. One example is a business line of credit. This allows you to borrow only when you need money but to have a pre-approved amount ready when you need it. Another option is equipment financing. This is for buying a piece of equipment using the equipment as the collateral. Terms and rates for such loans may vary.
As you can see, there are many textiles industry financing options. It all depends on your situation and your needs as to which will work best for your business.
