Textile and Apparel Manufacturing Company- Financing and Loan

Textile and Apparel Manufacturing Company- Financing and Loan

Textile and Apparel Manufacturing Company- Financing and Loan

Published Jul 9 


HAVELET FINANCE
By HAVELET FINANCE

99 Articles


A good financing decision works as a driving force for an organization to build a strong financial position. Financing decision varies from industry to industry, organization to organization according to their financing requirement, financial strength, and risk-taking behavior of that particular parties.

If you have in mind to implement and or finance a textile and Apparel manufacturing industry then you will be required a large amount of funds for a startup. Unlike business financing, a huge expenditure will be required as working capital which is much less than the initial investment.


On the other hand in the service industry, you have to invest a large amount of capital in the initial year and the operation cost is not that much high.


Financing for a textile and apparel manufacturing companies what comes to mind is purchasing of different types of equipment as; (power and electricity generator, spinning machine, knitting machine, dyeing machine, printing machine, sewing machine, cutting machine and many more)


Such requires lots of money and our huge amount of capital will be invested for this purpose. In addition to this thousand garments, the worker will be working here, for payment of salary and wages you will be required a larger amount of working capital. On the other hand for importing raw materials you will also be required a huge amount of money.


If you want to expand your business to increase production capacity you have to invest a huge amount of money on a long-term basis.


The question is how you can manage this required money and from where you can source this money. At the time of sourcing of money/ fund, you always have to be careful about the cost of that fund, the least costing source will be preferable.


Initial cost for Starting a Textiles and Apparel Manufacturing Business

Setting up a Textiles and Apparel business consumes a whole lots of money. A large amount of capital is required for purchasing capital machinery. Capital machinery and equipment’s for the long-term it will be a better decision of financing from the long-term sources. Available options for financing are:


  1. Long-term bank loan (Debt Financing).
  2. Selling share (Equity Financing); in case of a public limited company.
  3. Or you can choose both debt financing and equity financing (the ratio of debt to equity will depend on the financial strength and the business risk of that company).
  • Fixed cost financing may increase your financial risk, so try to avoid full debt financing.
  • On the other hand, equity financing is more costly as you have to share all of your profit proportionately according to the contribution of equity capital.


Havelet Finance Limited is a Channel Island private loan and finance company with a broad international presence, specializes in financing large projects in the heavy industry, energy, oil and gas sectors and other capital-intensive areas of the modern economy. We offer long-term financing for the construction and modernization of modernized Textiles and Apparel manufacturing company, including project finance, guarantees, SPV establishment and management, project management, and financial and legal consulting services.


Financing for Maintaining Daily Expenditures

Maintaining daily expenditures means, managing working capital funds for your business operations or management of current assets and current liabilities. You may source your working capital either from long term or short term sources and the decision will depend on the working capital management policy (hedging, conservative, aggressive) of yours. Before choosing working capital management policy you have to have a brief idea of these policies:


  • Hedging Policy of Working Capital Management: Hedging policy is one of the popular policies of managing funds where a matching principle is used. Financing for a current obligation is done from the current assets (current sources) and on the other hand financing for a long-term obligation is done for the long-term assets (long-term sources). That means for a short-term requirement of funds you need to collect from short-term sources and for long-term requirements you have to collect from long-term sources.
  • Conservative Policy of Working Capital Management: In the case of conservative policy company has the intention of taking a low risk for financing the current asset. Additional fund required for fixed assets company keeps the extra fund for using as a current asset. Here company financing (collecting) more funds from the long-term sources for both the current asset and fixed/long-term assets. The main intention is to lower the risk of financing for current assets.
  • Aggressive Policy of Working Capital Management: the Aggressive policy of working capital management is a risky policy in the sense that most of the required funds for current and long-term assets are to be financed from the short term sources, a lower amount of funds will be collected from the long-term sources. Basically, the money will be kept less than the required amount for working capital that why risk is higher.


Financing for Expansion of Textile and Apparel Business

Textile and Apparel required a lot of money. Expansion of business or expansion of production capacity requires a larger investment for purchase machinery and equipment, land, construct a building, etc. This is more or less similar to the initial investment for your business. In addition to acquiring capital assets, you have to hire workers and employees for supporting your business expansion. The thing is you have to pay wages and salaries, purchase of additional raw materials, or any other operating expenditures. So you can manage this extra money from both long-term sources and from short-term sources. Whether you choose long term or short term sources, is mainly depends on your financial strength and adequacy of money for your existing business. Normally a profitable textile and garments company has the intention to expand when they find that the business is profitable and they can manage their extra required fund from their own profit.



If you are interested in financing the construction of a Textile and Apparel or a loan for the modernization of equipment, please contact our official representatives at any time.


We are ready to provide financing from 50 million euros and more on flexible terms, guaranteeing comprehensive support from our financial and legal specialists.

Website:

Email: credit@havelet-finance.com



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