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Emerging Designers learn about Factoring and Financing


By JoBeth Tananbaum

I recently had the pleasure of speaking at Design Entrepreneurs New York City. The prestigious “mini MBA” program provides selected designers with the business acumen, resources and a community to grow their companies. Each year, 25 designers are accepted into the program and spend several weekends learning about marketing, financials and operations taught by FIT instructors and industry experts.

I was excited to participate in the program as an industry expert, educating attendees on the value of factoring and other types of alternative finance for both fashion businesses and consumer product companies. Receivables management can be a tremendous resource for emerging designers as it provides access to critical working capital, and enables brands to succeed in the long-term. An important highlight from the talk was identifying the appropriate financing product available to brands at specific moments in the order-to-cash cycle. For example, using purchase order financing to fund production versus factoring to finance receivables after they have shipped. By understanding the difference in the types of financing and the costs associated with each, enables designers to make better decisions.

For example, a designer needs to differentiate if they need P.O. financing in order to fund the piece goods and manufacturing costs associated with an order, or factoring to help fill the cash needs immediately following shipment but before a retailer pays (sometimes it can take up to 60-90 days after shipment). Ultimately, designers left with a better understanding of the myriad of factoring services offered by Capital Business Credit including full-service factoring, non-notification factoring and credit services, and the purchase order financing services available to NYC-based brands through the NYC Fashion Production Fund.

I was incredibly grateful to be able to learn with and from this talented group of designers and look forward to hearing many great things from all these brands in the near future.