“Fast fashion” is a term used to describe the newest trend in high-fashion apparel. In order to compete with second-hand stores and bargain brands, some formerly high-price designers have begun offering large quantities of affordable, attractive clothing engineered to capture a buyer’s attention and inspire an impulse buy. In order to keep profits high, designers must release a constant stream of affordable and desirable clothing.
The key to success in the fast fashion industry is creating a product that provides an irresistible temptation—it should be something customers want now. Creating this environment requires the designer to be flexible and courageous, and designers must be able to change their tactics quickly to keep up with market demand. Fashion today is an industry with a short shelf-life, and this creates a unique set of requirements for financing any fashion business.
When looking for a lending institution to finance your fast fashion business, you’ll need to choose a lender with a quick turnaround and competitive rates. Your profit margin will be slim, especially in the beginning, while you focus on building a loyal customer base and establishing sourcing relationships, so keeping your costs as low as possible will enable you to maximize profitability. Moreover, a fast-paced industry, such as fashion, requires a financial partner that can respond to your needs quickly, not one that labors over decisions or credit applications.
Other attractive features in a lending relationship include options for import or export financing. As your business grows, you may want to expand beyond our borders and begin marketing the product overseas, and export financing is an important tool in that process. Similarly, importing product can help keep prices down and make it easier to keep up with a competitive industry but only if you have a financial partner that both understands your trade cycle and offers competitive import financing options.
Finally, finding a lender who is flexible and who can add value to your business is crucial. Any time you ship product to customers, you run the risk of not being paid. By choosing a non-recourse factor, you can reduce the credit risk to you posed by these circumstances. For any fast-moving business with uncertain profits, this is extremely important.
Launching any business comes with risk, but choosing the right lending institution will help mitigate these risks and increase your chances of success.. Careful research, coupled with an understanding of your needs, will help you find the right financial fit. In choosing the right financial institution, to finance your fast paced, fashion business, you will be placing your business in the best place to succeed.