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Economic Speed Bumps and Their Effect on Financing

default author logoBy Tri Sciarra

Recently, I was asked by California Apparel News, what economic speed bumps I thought manufacturers were going to face this year and how it would affect their ability to get financing. Here is an excerpt of what I told the publication:

While there is no crystal ball to predict the challenges manufacturers will face in 2013, there are some issues that are unresolved from 2012 which are having a lingering impact in the New Year. In Q1 of 2013, manufacturers will continue to have to deal with the effects of Super Storm Sandy. Many retail customers could not or did not accept all orders that were supposed to be shipped prior to the year’s end due to the storm. As such, manufacturers are carrying more inventory on their books and in their warehouses than previously planned. At Capital Business Credit this is causing more requests for over advances.

Additionally, in Q1 the Chinese New Year can be an ‘economic speed bump’ for manufacturers as there could be up to a four week shutdown at Chinese factories. This also causes the need for over advances and or trade finance programs to ensure that supplier gets paid earlier to ensure that goods are actually shipped before the holiday begins.

Click here to read my full response