Fashion brands rely on sales in department stores on to pay their bills. Demand for new product has disappeared, as major retail chains shuttered their stores amid the coronavirus pandemic.
, have shuttered their stores amid the coronavirus pandemic. Many are not paying for shipments of products already in their stores
Unlike other small businesses, many of these brands are limited in their ability to tap the $350 billion small business loan program established as part of the $2 trillion stimulus and relief bill signed by President Donald Trump late last month. Fashion brands often depend on a financing method called factoring, by which they can use their outstanding payments owed as collateral for cash. Other businesses typically rely on bank loans for financing.
"We already know there's not going to be enough money [for the small business loan program]," said Wassner of Hildun, a factoring firm. "You're asking an industry that relies on factoring to now to go to now establish an account at a bank they have no relationship with. By the time they've gotten to the end of the queue, they're out of money."he is seeking an additional $250 billion for the small business loan program.
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