Forums: Discussions for entrepreneurs and small business.

Our company has started getting a lot of interest from stores (and a few test orders).  We manufacture plus-size clothing.  We also sell online.  But one of the difficulties we`re facing is not having enough funding to create inventory.  We also need a workspace.  There are a few other obstacles, that I would rather discuss privately.  But my question is... would we be able to get factored for small orders?  Or would we need to seek an investor? 

Any advice is appreciated.

Thanks!

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http://www.annalogy247.com
Stylish Plus-size Clothing for Women

One unique feature of factoring is that the Factors look at the credit worthiness of the customer (buyer) rather than the supplier. So if you are selling to companies that have excellent credit rating - you can probably arrange to factor those invoices. However, for small amounts, you may have difficulty attracting a reputable factoring company. Also, it can be expensive if you use it as a "long term" financing strategy.

Getting an investor is another possibility but not the only one. There are at least 50 ways/sources of business capital. Not all are appropriate for every situation.

The first variable in determining YOUR optimum funding method is:

How much capital do you need ?

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Factoring is absolutely available for start-ups for even small dollar amounts when selling your product to creditworthy businesses. Factoring is often a perfect funding solution for startups since the amount of financing can grow as quickly as you can sell your product. 

The cost of factoring will range from 2.5% to 4% per 30 days.  To receive the lowest rates, you have to factor significant volumes on a monthly basis.  Advance rates range from 60% to 85% of the face amount of the invoice and will depend upon factors including return provisions and history. 

When compared to bringing in an investor, factoring is faster, cheaper and doesn`t require you to give up any of your ownership in your company! 

Factoring is viable, even if you have just a modest turnover; however, it will limit potential growth capital to the revenues you are generated from selling your products. If that is enough, you should further explore factoring or try establishing a revolving line of credit with your bank.

If you require capital to fund further growth you can explore funding sources such as the SBA (Small Business Administration) on the federal level and other similar resources in the state where your business is located. Another option is procuring growth financing via private equity investments (investors).

The most suitable way to go about securing growth financing definitely depends on your strategic business objectives, the amount of financing you are interested in, and the financial track record/upside potential of your business to support such financing.



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Jackson Steiner
http://www.JacksonSteiner.com

Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com

I am so sorry to take this long responding.  But personal matters interfered with my getting back to you.  Thanks so much to all of you for answering my question.

As it turned out, our business went under and we had to start over.  My husband had major surgery in 2007 and my mom passed away shortly thereafter.  Several other factors contributed to our failure.  But we learned a lot and the experience was invaluable.  We are back on our feet now and have changed the name of our company to Annalogy.  Our website is:  www.annalogy247.com.  We still specialize in contemporary plus-size clothing.  I've posted a few photos on my profile.  Feel free to take a look.

We recently returned from the debut of our Spring 2011 collection in Las Vegas.  Our fashion show was well-received!  We're grateful for that.  We currently sell online and have received orders from a few boutiques.

Again, thanks for all the responses.  We will follow-through and let you know how it goes.

Sincerely,

Dorez Douglas

VP., Annalogy

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http://www.annalogy247.com
Stylish Plus-size Clothing for Women

Thanks for sharing!

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